5. Another model, which can describe the trending behavior of the time series, is the following...

 

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5. Another model, which can describe the trending behavior of the time series, is the following "deterministic trend model": Yt t + Et, Yo = 0, Et ~ iid (0,0²). = (DT Model) (a) Briefly desribe the difference between (UR Model) and (DT Model). (b) Explain why the economic researchers would prefer (UR Model) to (DT Model) when modelling the trending economic time series. 5. Another model, which can describe the trending behavior of the time series, is the following "deterministic trend model": Yt t + Et, Yo = 0, Et ~ iid (0,0²). = (DT Model) (a) Briefly desribe the difference between (UR Model) and (DT Model). (b) Explain why the economic researchers would prefer (UR Model) to (DT Model) when modelling the trending economic time series.

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a The main difference between the Unit Root UR Model and the Deterministic Trend DT Model lies in ho... View the full answer