Examine the short-run and long-run causal
relationships between macro variables and stock market price.
For a country of your choice, download enough data (get the maximum number
of observations) on the following variables: stock market index, interest rate,
money supply (M2), and employment. Use this data to study the relationships
between stock market index, interest rate, money supply (M2), and employment. To
do so, you need to answer the following questions:
(i)Compute and discuss the descriptive statistics of your time series (in levels
and logs). Plot the series and describe patterns.
(ii)Report and comment on the ACF/PACF functions of stock market index,
interest rate, money supply (M2), and employment and their first-differences in log.
(iii)Use appropriate Dickey–Fuller tests to test if the variables stock market
index, interest rate, money supply (M2), and employment and their first-differences in log
are non- stationary (have a unit root) or not. Explain the test procedure, report the test
statistics and the appropriate critical values (at 5% significance level) and discuss the
(iv) Test for cointegration among the four variables using Johansen’s tests.
Explain the test procedures, report the test statistics and the appropriate critical values (at
5% significance level). How many macro variables are cointegrated with stock market
price? Discuss the results.
(v)If you have found one or more cointegrating relations, estimate the longrun
causal relationships (i.e., the cointegrating relations) and the Vector Error Correction
Model. Otherwise, use the Box-Jenkins procedure to estimate a VAR model for the
appropriately transformed (de-trended or differenced) variables. Report the results of
Granger causality and the impulse response functions. What are the macro variables that
affect stock market price? Discuss the results.
(vi) Find three published papers on the relationship between stock market
price and macro variables and discuss/compare your results to those obtained in these
Use of Arial font size 11 for this assignment.
Overall word limit, 2500 words maximum.
The word count should:
• Include all the text, including title, preface, introduction, in-text citations,
quotations, footnotes and any other item not specifically excluded below.
• Include all the references at the end of the text (The reference do not count on
the overall word limit)
• Exclude diagrams, tables (including tables/lists of contents and figures),
equations, executive summary/abstract, acknowledgements, declaration and
As far as grouping, Directorate General of Sea Transportation offer expert to Biro Klasifikasi Indonesia respects frame development, electrical and apparatus. Other viewpoint, for example, radio correspondence and security gear are reviewed by Directorate through their Marine Inspector (Rusdi,2009). This various characterizations ought not be an issue if all aspects of direction is entirely actualized. In any case, regularly individuals contend that BKI's position isn't helped by its nearby connections with the Ministry of Transportation, where choices are frequently depicted as politically-propelled (Indonesian Class, 2007). Indonesia additionally tries to enhance law authorization, for example, specialized review to traveler vessel and ro-ro ship, endorse for reckless harbourmaster and marine assessor, permit denial for careless administrator and condition appraisal study for wellbeing necessity in ro-ro ship which more established than 25 years. In 2007, there are 4 authority and 1 administrator were authorized (Ministry, 2008b). Shockingly, in a few cases, insufficient security types of gear are still established. For instance, in KM Levina mishap case, it was demonstrated that the sprinkle can not work. Amusingly, for wellbeing hardware testament, the ship have finish declaration. There are conceivable outcomes that security hardware not deliberately reviewed (Rusdi, 2009). As Gunther, executive of interferry, remarks that numerous issue are caused by poor administrator organization (High waves, 2009). This issue ought to be cover by port clearing necessity; along these lines, law implementation ought to be significantly stricter. Plainly expressed in Article 94 UNCLOS 1982 that one of the obligations of banner state is to take such measures for ships flying its banner as are important to guarantee wellbeing adrift, which required to comply with by and large acknowledged universal controls (UNCLOS, 1982). Having consider that States ought progress toward becoming gathering to the tradition, as well as completely actualized their commitments, IMO build up Resolution A.996(25) Code for the Implementation of Mandatory IMO Instruments. In light of this code, there are systems that ought to be produced by the States so as to accomplish target of the code, which is upgrading worldwide oceanic security and insurance of marine condition (IMO, 2007). Indonesia through its oceanic organization ought to set up framework which build up this technique to satisfy their obligation as banner state. This paper endeavor to think about four methodologies say in Resolution A.996(25) with framework built up in Indonesia by and large; and particularly investigate the result of the code for Indonesia as far as loss examination. II. Procedure for upgrading sea security and insurance of marine condition In light of Resolution A.996(25), there are 4 methodologies ought to be created by the States. To start with technique, execution and requirement of IMO tradition; Implementation of banner state duty cover numerous viewpoint, for example, tradition elucidation, training and keeping an eye on, signal state examination, confirmation issues,â approval and checking RO, and loss examination. Be that as it may, these usage and requirement are completely relies upon capacity and ability of part parties. Contracting Governments implement the arrangements of IMO traditions to the extent their own particular boats are concerned and furthermore set the punishments for encroachments, where these are pertinent (IMO, 2009). Approve a Convention and bring it into full and finish impact through inside law isn't simple for contracting government. To build up viable sea enactment, after set it up, it ought to be anything but difficult to change and keep refreshed with IMO change, set up IMO authoritative following, go to IMO meeting and keep up successful correspondence with different parts of government (Belcher, 2009). Review and confirmation is one of the approaches to uphold standard created by organization. Now and again, nations which are absence of skill and experience have discovered comfort in appointing their capacities to Recognized Organizations (Villanueva, 2004). Numerous created organizations likewise chose to designate piece of their capacity to RO, so as to viably extend their abilities on overall premise. RO, for example, grouping society have accepted as expert answer for worldwide surveyor system and specialized skill (Schlott, 2009). Be that as it may, a few issues emerge with respect to statutory work appointment. For instance, review of Denmark demonstrates the necessities of more powerful observing of statutory overview record held by RO (VIMSAS-Denmark, 2007). Accordingly in term of approval, Maritime Administration ought to completely allude to Resolution A.789(19) "Particulars on the overview and affirmation elements of perceived associations following up for sake ofâ organizations" and Resolution A.739(18) "Rules for the approval of associations following up in the interest of the organization" (Schlott, 2009). Second system, adherence to universal suggestions; aside from Mandatory instrument, for example, Load Lines, SOLAS and COLREG, hail state ought to likewise allude to global proposal, for example, IMO determination or roundabout which contain rules or other non compulsory code. Thirdly is consistent survey and check of worldwide commitment consistence adequacy. One method for survey is by assessing port state control measurements. PSC normally distributed yearly reports that contain measurements on the execution of banner States and RO. Setback measurements likewise can give picture of consistence adequacy. Furthermore, far reaching estimation of banner State capacity to authorize and adequately uphold sea enactment is through Voluntary IMO Member State Audit Scheme. The significance of VIMSAS in check of banner State consistence is accentuated by IMO (Mansell, 2009). Reason for VIMSAS isn't to disgrace or point a finger at a state, however to help them in satisfying their obligations and commitments which advances hail State execution. The consequence of this review is known just to the State concerned, examiners and IMO secretariat, and reports from reviews are distributed as unknown (Franson, 2009). Last technique is accomplishment, support and change of general hierarchical execution and capacity. Human asset improvement will impact hierarchical execution; and great quality framework can guarantee accomplishment and upkeep of association execution. Organization can apply ISO 90001 or other equal quality framework. Besides, change should be possible through present new open administration standard. It is move far from organization to accomplishment of result, change from exemplary administration to adaptability and characterizes authoritative and individual targets through quantifiable execution pointer (Schröder, 2008). Albeit relatively difficult to execute all of NPM procedures, numerous organization in creating nations are actualizing chosen parts of NPM eminently giving more self-governance to open division associations, accentuation on comes about, responsibility for execution and results, present rivalry, contracting, and client introduction (Singh,2001). Multi-state participation for limit building is one case of new open administration usage to beat the restriction of association through worldwide collaboration (Manuel, 2009). III. Banner state execution in Indonesia Indonesia is a gigantic Archipelago nation contained 17508 islands, with 5.8 million square kilometers add up to territory of ocean and 95181 km length of drift line (Indonesian Maritime Committee, 2008). This given condition produces high reliance on sea transportation and furthermore impediment to grow high qualified and solid oceanic transportation framework. Three fundamental techniques in oceanic transportation advancement of Indonesia for 2009 are change of national transportation benefit, enhancing wellbeing and security of sea transportation and enhancing nature of HR (Ministry of Transportation, 2009). Indonesia likewise distributed long haul advancement procedures 2005-2025 for sea wellbeing, bury alia, keep up movement conspire, observing security and vessel status routinely, evaluation of specialized perspective and operational of vessel, controlling execution of arranged support frameworks, creating group profession, checking natural insurance and enhancing SAR task (Ministry,2008a). Particular here and now target are clarified in guide of sea transportation wellbeing change for 2006-2009 plans which incorporate offices, law authorization, direction, rebuild association, human asset, foundation rejuvenation and group socialization (Ministry,2008b). Particularly as a banner state, Indonesia is bound to the commitment of banner state obligations as say in UNCLOS. In light of Transportation Information Book 2007, Indonesia has 7,237 national armadas in 2007 (Ministry, 2008c). Contrast with the world, Indonesia is in number 11 in trader marine with 971 vessels in 2008 (CIA,2009). To keep up and guarantee that all vessels have completely consented to direction isn't simple errand for Indonesia. As 4 procedures specified in Resolution A.996(25) which ought to be built up, some are satisfied and some are not yet refined. >GET ANSWER