Question: 2. If the errors from the regression appear to be non- stationary, and dierencing appears appropriate, then dierence the forecast variable and all explanatory vari-

2. If the errors from the regression appear to be non-

stationary, and di®erencing appears appropriate, then di®erence the forecast variable and all explanatory vari-

ables. Then ¯t the model using the same proxy model for errors, this time using di®erenced variables.

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