##########  PS-239 - FALL 2006 #############################################
##########  DATA FOR PROBLEM SET 8      #############################################
# Generate data for Exercise 1
# Draw covariates
set.seed(101)
n<-1000
X1<-rnorm(n,mean=10,sd=3)
X2<-rnorm(n,mean=5,sd=2)
X3<-runif(n,min=10,max=20)
# Draw disturbance
u<-rnorm(n,mean=0,sd=1)
# Generate Y
Y<-10+2*X1+4*X2+3*X3+u
exercise1<-data.frame(Y,X1,X2,X3)

# Generate data for Exercise 2
set.seed(191)

# Generate random normal errors with mean 0 and standard deviation equal to 1
u <- rnorm(1000,0,1);
# Generate z
z<-numeric(1000)
# Fix z0
z[1]<=0
# Generate all other
for (i in 2:1000)  z[i]<-3+0.5*z[i-1]+u[i]
# Generate  y and lagged y
n=length(z)
y<-z[2:n]
lagy<-z[1:(n-1)]
exercise2<-data.frame(y,lagy)
save(list = ls(all=TRUE),file="W:/Teaching/Fall2006_PolSci239/ProblemSets/ProblemSet8/PSet8.RData")