How can I model quadratic fit after log transformation?
I am trying to recreate a regression model from Trade Analysis Textbook (Page 16, code for Stata):
According to my visualizations, such a model would fit the data better too.
This is how I modeled quadratic fit, but if I just try to add
log_gdp_ppc instead of
gdp_ppc R-squared decreases and squaring log seems a strange thing to do. It is also strange that the parabola changes direction (if I log transform
openness too relationship becomes linear).