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If a time-series is not stationary, how can stationarity of that series be obtained? (1 mark) Explain the relationship between order of integration and
If a time-series is not stationary, how can stationarity of that series be obtained? (1 mark) Explain the relationship between order of integration and non-stationary. (3 marks) Explain the relationship between integration and cointegration. (3 marks) Mention some possibilities of how stationarity or non stationarity of an economic variable can be established. (4 marks) What are weak stationary process and strong stationary process? (4 marks) What is the economic interpretation of an I(1), an I(2) and an I(3) variables? (5 marks) Why a non stationary variable is called an 'integrated' variable? What denotes the notation Y I(2)? Explain. (5 marks)
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There are 3 Steps involved in it
Step: 1
1 Obtaining Stationarity To achieve stationarity in a nonstationary time series you can difference the series until it becomes stationary This can inv...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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