How to interpret the three ADF specification equations?

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Amiro
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Joined: Tue Jan 31, 2017 9:39 pm

How to interpret the three ADF specification equations?

Postby Amiro » Tue May 08, 2018 3:10 am

Hi everyone,

I have tested gdp gap for stationarity using ADF test (non, and with only intercept). However, it has a unit root when accounting for trend and intercept. Does that means it is I(0) or (0)? Should I consider differentiating it?

On the same note, is differentiating the sole method to solve non-stationarity, or can one de-trend a time series?

P.S. differentiating using eviews itself did not result in changes in the multi regression estimation results. Therefore, I did the differentiated the data manually on excel.


thanks,
Amir,

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