OPEC Decision Explained

While there were speculation toward changes in oil production by OPEC. OPEC announced last week that there won't be any changes in level of production. While this approach were appreciated by some (i.e. Saudi Arabia, link here), it was not satisfactory for others such as Iran.(link here). 

As an economics student or a general audience who is interested in economics you may ask your self why S.Arabia didn't agree on reducing production ?! As less Supply more price. Well the story in Oil Market is not that simple !

Among OPEC countries like Iran and Venezuela who rely heavily on Oil income hoped that they can pressure OPEC to reduce the supply. However, in the other hand, S.Arabia which was enjoying the higher market share after Iran's Sanctions, didn't want to lose this market share. Interestingly enough those two countries in favor of reducing supply do not have a "good" relationship with USA or EU  which may raise questions around political motivation behind OPEC decision.
Personally, I believe the incentives behind S.Arabia's decision is more political than economic. With drops in oil price S.Arabia can make sure that the economics in Russia and Iran would still have lots to deal with.
However, at near future I think S.Arabia would regret this decision and they have to change their perspective and agree to reduce the production.

Some points about ARDL Bound test

If you have ever ran the ARDL bound test you know that this method is currently on top of "Box Office" and researchers, especially students are keen to have it on board. Some weeks ago, I got a message in Eviews Support Forums about the Add-in which I coded for ARDL Bound. If you are thinking to give a go, I would like have your attention on these points(You can read the whole story here): 

There are three points in this subject:

1- The difference between ARDL bound test and ARDL level(conventional)

2- The difference between Eviews and Microfit procedure

3- The number of observation

1- I haven't used Microfit. However, from the results you provided my guess is in Microfit RHS variables are in level. This means Microfit follows an ARDL in the level, whereas in ARDL bound test we have lagged of differeced variables. In other words in ARDL bound test is more like an ECM (look at the equation 4 in Dave Giles explanation http://davegiles.blogspot.com.au/2013/06/ardl-models-part-ii-bounds-tests.html)than ardl as time series structure. Coming from different assumption, they might have different lag structure. Which one you want to choose ?! that's totally depends on what you are doing, ARDL bound test or ARDL ?

2- Again from your result I am guessing that Mircofit starts the lagging process by lagging the main variable(LHS) then goes to other RHS variables. However, in Eviews we start with lagging last variables. The reason for doing so is, in ARDL bound test we are interested in long run co-integration. Or We want to see if we can find any significant changes in our LHS because of changes in trend of RHS. And I personally believe ARDL(2,4,7) is much more meaningful than ARDL(7,4,2). Saying that if you have enough observations and follow the same method (ARDL bound) in both software you should get same lag structure.

3- Personally, I don't feel confident using ARDL bound method with observations less than 35-40, because after lagging the variables you end up with 7 or 8 data points which doesn't seem practical. Therefore I strongly suggest that you should increase n. However, the error that you see is not from add-in it self and it is a standard Eviews error. To check the error you can run the regression manually, something like :

series dy=d(y)

series dl1=d(l(-1))

series dy1=d(y(-1))

series dk1=d(k(-1))

then 

ls dy c y(-1) k(-1) l(-1) dy1(-1 to -5) dk1(-1 to -5) dl1(-1 to -5)

and result would be "insufficient number of obs" . Even the result of ls dy c y(-1) k(-1) l(-1) dy1(-1 to -5) dk1(-1 to -4) dl1(-1 to -4) doesn't seem realistic with R2=1 !!

Long story short : 

- The difference comes from difference in the methodology ! so which methodology you choose will determine which software you want to use.

- Increase your T, if you can't my suggestion is consider other co-integration methods.

Economics Academics Salary all around the World

Today I came across the following post by INOMICS Blog which is quite interesting ! Yeah for us to find a academic job at Australia:

Yesterday, INOMICS released the Job Market Report 2014 (Worldwide Overview). The Report is based on a survey conducted between April and June 2014, and contains insights about the job market from 1,064 academic professionals from all over the world. The findings include information about professional profiles and status, experience, education and, most significantly, their respective salaries.

The focus of the report is on the academic job market with the majority of respondents representing universities, research institutes or think tanks and possessing high academic qualifications.

The highest salaries for PhD holders with 3-10 years of experience were reported in Australia, with an average salary of $98,000. The average annual salary for similar professionals in Europe varies between $36,000 and $56,000. In the positions of Assistant Professor, Associate Professor and Mid-level Manager, respondents in Canada have the highest earnings ($89,000, $110,000 and $55,000, respectively).

Another key finding of the Report was that one can expect a 50% salary increase after working for 5 years. Slightly more than 40% of respondents with a Bachelor’s degree earned less than $15,000 per year, while over 60% of those respondents with PhDs reported earnings of at least $35,000 annually.

The numbers presented in the graph above show the average income of Full Professors from a given country, based on the responses from our survey, without any adjustments. Of course, when comparing salaries in different countries, a lot of factors should be taken into consideration, including living costs, social security and salary differentials. Nevertheless, these numbers serve as a fair indication of the wage level for academics in each given country.

In the following weeks we will release a series of blog posts that will include more detailed information about salaries for different positions and career levels in specific countries.