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Searched for: [ Keywords: "Cointegration" ] clear all
Journal Article
Vector Error Correction Models with Stationary and Nonstationary Variables
by Pu Chen
Abstract
Vector Error Correction Models (VECM) have become a standard tool in empirical economics for analyzing nonstationary time series data because they integrate two key concepts in economics: equilibrium and dynamic adjustment in a single model. The current standard VECM procedure is limited to time series data with the same degree of integration, i.e., all I(1) variables. However, [...] Read more