Conintegration is
A)an iterative process for removing a unit root.
B)an iterative process for correcting the data for the presence of autocorrelation.
C)an empirical method for removing a unit root.
D)an empirical method for making a time-series I(1).

Question

Quizplus · Accepted Answer

Cointegration is an empirical method for analyzing the relationship between non-stationary time series variables. When two or more time series are cointegrated, it means they share a common stochastic trend despite being non-stationary on their own. This concept is crucial in econometrics for establishing long-run equilibrium relationships among variables.

Conintegration Is