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Question 2. (7 points) A study relates patterns of industrial production and unemployment in US through a regression of end-of-quarter measure of industrial production
Question 2. (7 points) A study relates patterns of industrial production and unemployment in US through a regression of end-of-quarter measure of industrial production (INDPROD, measured in billions of dollars) on quarterly rate of unemployment (UNEMPLOYMENT, measured in percentage terms), INDPROD = o + BUNEMPLOYMENT+_1 ++ Your research group worries about inferences coming from this model, given that some of these variables might be nonstationary. Please describe how would you test whether data on industrial production is nonstationary or not.
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