Enquire to the usage of EViews (Granger Causality Test)

[chan]

Hi all,

My name is Jonathan and I am from Hong Kong. I am a final year student studing in the Hong Kong Polytechnic Univeristy and actually I am now working on the dissertation in order to fufil my degree course. In my dissertation, I would need to employ the Granger Causality Test as a research methodology.



However, I have actually encountered some of the logic problem in using the Granger Causality Test and would like to seek for your advices.




I would wonder if I am going to employ a Granger Causality Test with my data set (with 2 variables). Shall I first go with the Unit Root Test, in order to make sure the data set is stationary, then secondly employ a Akaiki Information Criterion Test, in order to find out the optimal lag selection, and finally employ the Granger Causality Test, with the stationary data set and the appropriate lag selection? Am I right in this flow of logic?




Thank you so much in advance. Look forward to listening from your reply. Many many thanks.




Yours truly,

Jonathan from Hong Kong