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- Sun Mar 02, 2014 8:19 am
- Forum: Econometric Discussions
- Topic: Error Correction Term (ECT) in VECM model
- Replies: 0
- Views: 2197
Error Correction Term (ECT) in VECM model
I'm having difficulty understanding the meanings of short and long-run relationships between variables, especially the ECT in VECM model. What does ECT mean and does it belong to a dependent or independent variable? What is the long-run equilibrium in VECM model mean? Could anybody explain it for me...