Prices and wages in your model are covariance stationary

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You collect unadjusted, quarterly data on nominal wages, unemployment, and prices in the United States from 1940 through 2011 from the United States Bureau of Labor and Statistics. Wages are the median wage in the United States in each quarter, the unemployment rate is reported for each quarter, and price is an index based on the Consumer Price Index in each quarter.

Do you believe that prices and wages in your model are covariance stationary? Why or why not, and how could you adjust your model accordingly?

Reference no: EM131135350

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