The data file phillips 5_aus contains quarterly observations on the Australian unemployment rate ((U)), and the Australian

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The data file phillips 5_aus contains quarterly observations on the Australian unemployment rate \((U)\), and the Australian inflation rate (INF) from 1987Q1 to 2016Q1. Plot these series and perform unit root tests on them to assess whether or not they are stationary. In your answer, justify your choice of a test equation, present the results from estimating that equation, state the null and alternative hypotheses, and draw a conclusion. Use a 5\% significance level. What are the orders of integration of the two series?

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Principles Of Econometrics

ISBN: 9781118452271

5th Edition

Authors: R Carter Hill, William E Griffiths, Guay C Lim

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