)How do you transform the model to make it stationary? Show your procedure.

  • June 25, 2021

)How do you transform the model to make it stationary? Show your procedure. Suppose x, follows white noise process such that x, ~(, 1) and yt follows white noise ocess such that y,~N(0,2) )Do you think that x, and y, are cointegrated? Explain.)Refer to the below figure. Velocity Nominal GDP/M2, where velocity is money velocity a 12 is money supply. Do you think that Nominal GDP and M2 are cointegrated? Explain. U.S. Nominal GDP, M2, and Velocity1960-20133.5003.0002,500 Nominal GDP2000 M21.5001,000500 Velocity19601965197019751980198519901995200020052010

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