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data stationary

Posted: Fri Aug 02, 2019 7:45 am
by scboy
Hi all, i am new to eviews. and i am trying to detrend UK CPI data. it is the pvalue in adf test is smaller than 0.05 and reject the null there is a unit root at Level- trend and intercept test. but after I've generate detrend residual series. i can still see there's trend in residual series. how do i fully remove the trend?

Re: data stationary

Posted: Fri Aug 02, 2019 9:44 am
by scboy
the detrended residual series seems to have a trend.

Re: data stationary

Posted: Fri Aug 02, 2019 10:11 am
by startz
I'm not sure why you want to detrend the series, but you could try regressing on both a trend and a trend squared,.

Re: data stationary

Posted: Fri Aug 02, 2019 4:03 pm
by scboy
Thank you Startz. I am trying to remove the trend because the Cpi data has an upward slopping trend. correct me if i am wrong.....from what i learned in class that is non stationary data so we have to make to stationary before estimate equation?
Even i did trend and trend squared, residual series still doesn't look random.

Re: data stationary

Posted: Fri Aug 02, 2019 4:26 pm
by startz
If data has a unit root, then it can be problematic in a regression. Data which is trend stationary is not generally a problem. So you shouldn't need to detrend at all.

Re: data stationary

Posted: Sat Aug 03, 2019 4:41 am
by scboy
Startz, i know this is too much to ask, but could you take a look of my workfile and point out which log series i should detrend or do anything to make them stationary please?