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Panel 1C and 1D show the Augmented Dickey-Fuller (ADF) test results for the log(exrate) (i.e., LEXRATE) and the log(CP) (i.e., LCP). Why is the ADF
Panel 1C and 1D show the Augmented Dickey-Fuller (ADF) test results for the log(exrate) (i.e., LEXRATE) and the log(CP) (i.e., LCP). Why is the ADF test preferred to the DF test?
Panel 1C (LEXRATE) Panel 1D (LCP) Exogenous: Constant, Linear Trend Exogenous: Constant, Linear Trend Lag Length: 0 (Automatic - based on SIC, maxlag=13) Lag Length: 1 (Automatic - based on SIC, maxlag=13) t-Statistic Prob.* t-Statistic Prob.* Augmented Dickey-Fuller test Augmented Dickey-Fuller test statistic -2.422430 0.3664 statistic -1.613724 0.7827 Test critical Test critical values: 1% level -4.025924 values: 1% level -4.026429 5% level -3.442712 5% level -3.442955 10% 10% level -3.146022 level -3.146165Step by Step Solution
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