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Copy pathMilitary Expenditure as Productive Public Investment for Economic Growth: An Assessment of Bangladesh Economy do file.do
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Military Expenditure as Productive Public Investment for Economic Growth: An Assessment of Bangladesh Economy do file.do
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set more off
clear all
use "https://github.com/azmeer54/Military-Expenditure-as-Productive-Public-Investment-for-Economic-Growth-An-Assessment-of-Banglades/blob/main/Military_Expenditure_as_Productive_Public_Investment_for_Economic_Growth_An_Assessment_of_Bangladesh_Economy.dta?raw=true"
//declaring time series data
tsset Year, yearly
sort Year
//generating p, TFP
generate lnGDPLCU= ln(GDPLCU)
generate lnkstock= ln(kstock)
generate p1= (D.lnGDPLCU)
generate p2= 4.148210
generate p3= 0.583042*(D.lnkstock)
generate p=p1-p2-p3
drop p1 p2 p3
//Calculating Z
generate Z1= n + d + p
generate Z = Z1 + 4
drop Z1
//Formatting OGEX
generate OGEX = GFCE - MILEX
//Initial Regression
generate lnY= ln(RGDPPC)
generate lnHUMCAP=ln(HUMCAP)
generate lnZ=ln(Z)
generate lnMEX=ln(MILEX)
generate lnOGEX=ln(OGEX)
generate lnINV=ln(INV)
//Starting Texdoc
texdoc init "MilExPaper.tex", force cmdstrip nooutput replace
texdoc stlog "OLS"
reg lnY lnMEX lnOGEX lnINV lnHUMCAP lnZ
estat dwatson
texdoc stlog close
texdoc stlog "VIF"
vif
texdoc stlog close
//Make the Model first Differenced
drop lnY lnMEX lnOGEX lnINV lnHUMCAP lnZ
//constructing the first difference transformations
generate DlnY= ln(RGDPPC)-ln(L.RGDPPC)
generate DlnHUMCAP=ln(HUMCAP)-ln(L.HUMCAP)
generate DlnZ=ln(Z)-ln(L.Z)
generate DlnMEX=ln(MILEX)-ln(L.MILEX)
generate DlnOGEX=ln(OGEX)-ln(L.OGEX)
generate DlnINV=ln(INV)-ln(L.INV)
//Lag Selection: BIC
varsoc DlnY , maxlag(4) //lag 3
varsoc DlnMEX, maxlag(4) //lag 3
varsoc DlnOGEX , maxlag(4) //lag 4
varsoc DlnINV , maxlag(4) //lag 4
varsoc DlnHUMCAP, maxlag(4) //lag 1
varsoc DlnZ, maxlag(4) //lag 3
//UNIT ROOT TESTING-AUGMENTED DICKY FULLER
dfuller DlnY, lags(3) //non-stationary
dfuller DlnY, lags(3) trend //non-stationary**************************
dfuller DlnY, lags(3) drift //non-stationary**************************
dfuller D.DlnY, lags(3) //stationary
dfuller D.DlnY, lags(3) trend //stationary
dfuller D.DlnY, lags(3) drift //stationary
dfuller DlnMEX, lags(3) //stationary
dfuller DlnMEX, lags(3) trend //stationary
dfuller DlnMEX, lags(3) drift //stationary
dfuller D.DlnMEX, lags(3) //stationary
dfuller D.DlnMEX, lags(3) trend //stationary
dfuller D.DlnMEX, lags(3) drift //stationary
dfuller DlnOGEX, lags(4) //stationary
dfuller DlnOGEX, lags(4) trend //stationary
dfuller DlnOGEX, lags(4) drift //stationary
dfuller D.DlnOGEX, lags(4) //stationary
dfuller D.DlnOGEX, lags(4) trend //stationary
dfuller D.DlnOGEX, lags(4) drift //stationary
dfuller DlnINV, lags(4) // non-stationarity
dfuller DlnINV, lags(4) trend // non-stationarity******************
dfuller DlnINV, lags(4) drift // stationarity
dfuller D.DlnINV, lags(4) // non-stationarity
dfuller D.DlnINV, lags(4) trend // non-stationarity*****************
dfuller D.DlnINV, lags(4) drift // stationarity
dfuller DlnHUMCAP, lags(1) //stationary
dfuller DlnHUMCAP, lags(1) trend //stationary
dfuller DlnHUMCAP, lags(1) drift //stationary
dfuller D.DlnHUMCAP, lags(1) //stationary
dfuller D.DlnHUMCAP, lags(1) trend //stationary
dfuller D.DlnHUMCAP, lags(1) drift //stationary
dfuller DlnZ, lags(3) //stationary
dfuller DlnZ, lags(3) trend //stationary
dfuller DlnZ, lags(3) drift //stationary
dfuller D.DlnZ, lags(3) //non-stationary
dfuller D.DlnZ, lags(3) trend //stationary
dfuller D.DlnZ, lags(3) drift //stationary
//%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
pperron DlnY, lags(3) //stationary
pperron DlnY, lags(3) trend //stationary
pperron D.DlnY, lags(3) //stationary
pperron D.DlnY, lags(3) trend //stationary
pperron DlnMEX, lags(3) //stationary
pperron DlnMEX, lags(3) trend //stationary
pperron D.DlnMEX, lags(3) //stationary
pperron D.DlnMEX, lags(3) trend //stationary
pperron DlnOGEX, lags(4) //stationary
pperron DlnOGEX, lags(4) trend //stationary
pperron D.DlnOGEX, lags(4) //stationary
pperron D.DlnOGEX, lags(4) trend //stationary
pperron DlnINV, lags(4) //stationarity
pperron DlnINV, lags(4) trend // stationarity
pperron D.DlnINV, lags(4) // stationarity
pperron D.DlnINV, lags(4) trend // stationarity
pperron DlnHUMCAP, lags(1) //stationary
pperron DlnHUMCAP, lags(1) trend //stationary
pperron D.DlnHUMCAP, lags(1) //stationary
pperron D.DlnHUMCAP, lags(1) trend //stationary
pperron DlnZ, lags(3) //non-stationary
pperron DlnZ, lags(3) trend //non-stationary**************************
pperron D.DlnZ, lags(3) //stationary
pperron D.DlnZ, lags(3) trend //stationary
texdoc stlog "ModelLagOrder"
varsoc DlnY DlnMEX DlnOGEX DlnINV DlnHUMCAP DlnZ, maxlag(4) lutstats //lag 1
texdoc stlog close
texdoc stlog "Cointegration"
vecrank DlnY DlnMEX DlnOGEX DlnINV DlnHUMCAP DlnZ, lags(1) trend(none) //Decision rank 5
texdoc stlog close
texdoc stlog "VEClongrun"
vec DlnY DlnMEX DlnOGEX DlnINV DlnHUMCAP DlnZ, rank(5) lag(2) trend(none) noetable //we have got it
texdoc stlog close
estimates store v1, title(VECM Estimation)
texdoc stlog "VECNORMmilex"
vecnorm
texdoc stlog close
texdoc stlog "VECstablemilex"
vecstable
texdoc stlog close
texdoc stlog "VECLMARmilex"
veclmar
texdoc stlog close
esttab v1 using "VECshortrun.tex", unstack longtable nonumber nomtitles title(VECM Short Run Coefficients) replace
//Revise these statements
texdoc stlog "causality"
test ([D_DlnY]: LD.DlnMEX) //MILEX has short run effect on Economic Growth
test ([D_DlnMEX]: LD.DlnY) //Econ Growth has hort run effect on MILEX growth
//Bi-directional Causality
test ([D_DlnOGEX]: LD.DlnMEX) //MILEX has short run effect on OGEX
test ([D_DlnMEX]: LD.DlnOGEX) //OGEX has short run effect on MILEX growth
//unidirectional causality
test ([D_DlnINV]: LD.DlnMEX) //MILEX do not cause INV
test ([D_DlnMEX]: LD.DlnINV) //Investment Do not cause increase in Military Expenditure
// No causality
test ([D_DlnHUMCAP]: LD.DlnMEX) //MILEX dont cause HUMCAP
test ([D_DlnMEX]: LD.DlnHUMCAP) //HUMCAP do not cause Military Expenditure
// No causality
test ([D_DlnZ]: LD.DlnMEX) //OGE has short run effect on MEX
test ([D_DlnMEX]: LD.DlnZ) //Econ Growth has hort run effect on MILEX growth
// No causality
test ([D_DlnY]: LD.DlnOGEX) //OGEX has short run effect on Economic Growth
test ([D_DlnOGEX]: LD.DlnY) //Econ Growth has hort run effect on OGEX growth
texdoc stlog close
texdoc close
clear all
///////////////////////////////////////////////////////////////
//IRF
irf create MEX1, step(20) set(vecMEXirf) replace
irf graph oirf irf, impulse(DlnMEX) response(DlnMEX)
graph export ImpulseResponseMEX.pdf, replace
irf graph oirf irf, impulse(DlnMEX) response(DlnY)
graph export ImpulseResponseY.pdf, replace
irf graph oirf irf , impulse(DlnMEX) response(DlnOGEX)
graph export ImpulseResponseOGEX.pdf, replace
irf graph oirf irf, impulse(DlnMEX) response(DlnINV)
graph export ImpulseResponseINV.pdf, replace
irf graph oirf irf, impulse(DlnMEX) response(DlnHUMCAP)
graph export ImpulseResponseHUMCAP.pdf, replace
irf graph oirf irf, impulse(DlnMEX) response(DlnZ)
graph export ImpulseResponseZ.pdf, replace
irf table oirf irf, impulse(DlnMEX) response(DlnY DlnMEX DlnOGEX DlnINV DlnHUMCAP DlnZ) title(~)
texdoc stlog "OIRFtable"
irf table oirf, impulse(DlnMEX) response(DlnY DlnMEX DlnOGEX DlnINV DlnHUMCAP DlnZ)
texdoc stlog close
texdoc stlog "IRFtable"
irf table irf, impulse(DlnMEX) response(DlnY DlnMEX DlnOGEX DlnINV DlnHUMCAP DlnZ) title(~)
texdoc stlog close