Econometrics: Ch11 Further Issues In Using Ols With Time Series Data Study Guide Graded A+

When the series in question has an obvious upward or downward trend when should we obtain the first order autocorrelation, before or after de-trending? {Ans: After de-trending}What can we do to render a unit root process weakly dependent? {Ans: Simple transformations}What is a covariance stationary process? {Ans: a stochastic process with a finite second moment is covariance stationary its its expected value, variance and its covariances are constant over time - depends only on h and not on t - focuses only on the first two moments of the stochastic process}Which is a stronger covariance stationary or stationary and what do we call the stronger one? {Ans: Stationarity is stronger and we call it strict stationarity}What is a moving average process of order 1 [MA(1)]? {Ans: et is an independent and identical distributed (i.i.d) sequence, with mean 0 and variance 𝜎𝑒^2}What is a trend stationary process? {Ans: A series that is stationary about its trend, as well as weakly dependent, is called a trend-stationary process.}