Assume that the government would like to seek your advice about the policy of economic growth on CO2 emission in Malaysia in the long run. Basically, the objective of the research is to examine the impact of economic growth on CO2 emission in Malaysia for policy recommendations.

You are required to propose relevant econometric approaches with the aim to study the impact of economic growth on CO2 emission in Malaysia. These includes:

Question 1 
Based on the scenario above,
a. Propose an appropriate model specification based on the scenario above.
b. Justify the selection of the dependent and independent variables used in the model. 

c. Justify the selection of the sample period. 

Question 2
In terms of the econometric perspective, what are the assumptions or elements that you need to consider in developing a model for estimation? 

Question 3 
Provide explanation and justification on the following:
a. How to select the different functional forms for modeling process?
b. How to interpret the results from econometric/statistical view? 

c. What are the possible diagnostic problems? 

d. How to overcome the diagnostic problems? 

Answer rating: 100% (QA)

1 a The appropriate model specification would be a regression model with CO2 emission as the dependent variable and economic growth as the independent variable along with other control variables such ... View the full answer