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 in an easy way? Thank you so much for your help.
Error Correction Term (ECT) in VECM model
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lonelyloner2012
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