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ECON3350: Applied Econometrics for Macroeconomics and Finance

Research Report 1

❼ icu: the natural logarithm of total daily COVID-19 patients in the intensive care unit; ❼ deaths: the natural logarithm of new daily COVID-19 deaths.

1. Use the data provided to forecast ICU occupancy for the period 08 March 2021—

31 March 2021.  In doing so, please describe how such forecasts may be useful for policy, and consequently, ensure your predictions and interpretation are aligned with the underlying motivation. Make sure to describe all potential sources of uncertainty. The break down of marks for this question is as follows (total 50 marks):

❼ motivation and practical purpose (10 marks);

❼ forecast model identification (10 marks);

❼ forecasts computation (10 marks);

❼ prediction and interpretation (10 marks);

❼ writing and organisation (10 marks).

2. Use the data provided to compute the dynamic effects of mobility restrictions on new cases and ICU occupancy. In particular, investigate the following questions:

(a) Are there any identifiable equilibrium relationships between immobility and cases,

immobility and icu, cases and icu, or all three together?

(b) If immobility is increased by 1 and maintained at the new level thereafter, what

is the expected effect (all else constant) on cases (i) at the time of impact, (ii) 28 days after impact, (iii) 92 days after impact, (iv) in the long run?

(c) If immobility is increased by 1 and maintained at the new level thereafter, what is the expected effect (all else constant) on icu (i) at the time of impact, (ii) 28 days after impact, (iii) 92 days after impact, (iv) in the long run?

Again, in answering these questions, please consider how the answers may be useful for policy, and consequently, ensure your interpretation is aligned with the underlying motivation. The break down of marks for this question is as follows (total 50 marks):

❼ motivation and practical purpose (10 marks);

❼ model identification (10 marks);

❼ estimation and testing (10 marks);

❼ interpretation (10 marks);

❼ writing and organisation (10 marks).