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stationarity

Posted: Thu Aug 30, 2012 9:06 am
by psm999
hi...
a small problem regarding stationary. I have a data set for a period of 41 years (1970-71 to 2010-11). the model is as follows:
y c x1 x2 x3.
can i run a simple OLS model and interpret the results without testing for stationary?
Or is it necessary to test for stationary.

Re: stationarity

Posted: Mon Sep 03, 2012 9:40 am
by psm999
Hi can anyone help... with a brief explanation pl... :(

Re: stationarity

Posted: Thu Sep 13, 2012 5:33 am
by wjgatt
Whether the variables are stationary or not has implications on the results of the OLS estimates.

If you don't even know whether your variables are stationary or not, how can you have confidence in your results? Using the in-built unit root tests for each variable shouldn't take long.