## Data Research Writing Service involving Literature Review

## Data Research Homework Help on the Methodology

### Model for Data Research

**Previous studies have modeled the demand for foreign reserves as follows:**

Where R -reserves specifics country holds at t; M-real imports of a country; VR-a measure of the variance of the bop m is the mean propensity to import. Normally id country has higher imports; it's expected that it required more reserves. if this holds it should be positive. Thus, a higher VR value, implies that more reserves will be needed to yield a strong positive estimation of. The idea of including(m) is a result of the multiplier of Keynesian foreign trade. A higher value of m leads to a smaller multiplier. This then implies that there will be a reduced demand for the reserves. (Bahmani-Oskooee and Brown 2014). However, in line with the purpose of this study and given that the data is a panel, the data research homework helper modified this reserve demand model by including oil price, an indicator of whether a country is a net exporter of oil or not, and the interaction of both variables. The model is re-specified as below.

Where OP represents oil price, oil is an indicator variable that equals one suppose that a country is an oil exporter and 0 if a country isn't an oil exporter. VR is measured as a change in the current account balance, and a constant is added to all observations in order for the logarithm to be possible in case of negative values. Results Table 1 presents the summary statistics of external reserves, import oil prices, and current account balances. The average reserves for all the countries are $3.38e+11, with a variation of $4.36e+11. Within country variation in reserves is $3.29e+11 while between-country variation is $3.01e+11. Average import is 3.02e+11 and the overall variation is $3.95e+11. Variation between countries is 2.98e+11 while variation within country is 2.72e+11. The average oil price over the year is $50.48, and the variation is 27.57. Between variation is 0 because the price of crude oil is the same for all countries, and the within variation is $27.57. Average change in current account balance is $9.21e+08 and the overall variation is $3.02e+10. The between-country change in the current account balance is 3.16e+09 while the within-country variation is $3.00e+10 Table 1: Summary Statistics

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Detailed Regression Result for Data Research Homework Help**

The regression result is presented in table 3. From the result, the coefficient of the dummy variable is not significant (p=0.065). This connotes that demand for foreign reserves does not depend on whether a country is a net exporter of oil or not. We also observe that oil prices have a significant positive effect on reserves. A 1% increase in oil price increases reserves by 0.074% (p=0.019). This is in line with the findings of Imarhiagbe (2015), who also found a positive effect of oil prices on external reserves. Moreover, the coefficient of the interaction is significant (p=0.041) and positive. This connotes that the effect of oil price on the external reserve is greater for countries that are net oil exporters than countries that are not net oil exporters. Specifically, a 1% increase in oil price increases reserves by 0.14% but 0.074% for non-net oil-exporting countries. The sign of coefficients of M, VR, and m are consistent with what has been proposed in the literature (Bahmani-Oskooee and Brown 2014). A 1% increase in import increases reserves by 0.95% (p<0.001), while a 1% increase in the balance of payment variation increases reserves by 1.95%, and a 1% increase in average propensity to consume reduces reserves by 0.12%. Table 3: Regression result using a fixed-effect model