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Hi all,

my question in concerning the Johansen cointegration test.

If I test 2 series for stationarity and they turn out to be trend-stationary, does it make sense to test them for cointegration?
I think if they have a time(deterministic)-trend, they are not cointegrated but just have a common trend which has nothing to do with cointegration.
And if so, what does option number 4 in the Johansen-test mean (EViews Users Guide II, pp. 686-688).
I think I just did not really understand which option to chose for what kind of series. I found no hint on that in this forum...

Thanks for a short answer!

Did you find the answer? I'm also puzzled by the use of cointegration methods on trend-stationary data. My understanding is that 2 variables can be cointegrated if they share a common stochastic trend, but is it also the case if they share a deterministic trend?

Thanks.