What is meant by a stationary time series

Assignment Help Applied Statistics

Reference no: EM131381425

Q1. This question uses the data on unemployment.

(a) What is meant by a stationary time series and why is it important?

(b) Graph each time series and comment on whether you think it is stationary.

(d) Determine whether unemployment and the help wanted index are cointegrated.

(e) Estimate the error correction model for this relationship and comment on the results.

Q2. Consider the following gasoline demand function:

lnY_it = B₁ + B₂ lnX_2it + B₃ lnX_3it + B₄ lnX_4it + u_it

where Y is gasoline consumption per car, X₂ is real income per capita, X₃ is real gasoline price, X₄ is the number of cars per capital, i is the country code in all 18 OECD countries, and t is time (annual observations from 1960 - 1978).

Using the data provide:

(a) Estimate the demand function pooling the data.

(b) Estimate a fixed effects model using the same data.

(d) Comment on which model best describes the gasoline demand.

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Reference no: EM131381425

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len1381425

2/3/2017 1:22:43 AM

Please make sure the tutor will answer step by step answer NOT final answer. Please note final answer not accepted by the prof 3- use Stata Please let me know how much it will cost to solve this assignment Please note that I’m a student and my budget is limited.

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