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Author Question: The following is not an appropriate way to tell whether two variables are cointegrated: A) see if ... (Read 134 times)

abarnes

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on: Jun 29, 2018
The following is not an appropriate way to tell whether two variables are cointegrated:
 
  A) see if the two variables are integrated of the same order.
  B) graph the series and see whether they appear to have a common stochastic trend.
  C) perform statistical tests for cointegration.
  D) use expert knowledge and economic theory.

Question 2

In a VECM,
 
  A) past values of Yt -  Xt help to predict future values of Yt and/or Xt.
  B) errors are corrected for serial correlation using the Cochrane-Orcutt method.
  C) current values of Yt -  Xt help to predict future values of Yt and/or Xt.
  D) VAR techniques, such as information criteria, no longer apply.


kusterl

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Reply #1 on: Jun 29, 2018
Answer to Question 1

Answer: A

Answer to Question 2

Answer: A


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