Using the same data as in Exercise 14.2, a researcher tests for a stochastic trend in In(IPt) using the following regression:

where the standard errors shown in parentheses are computed using the homoskedasticity-only formula and the regressor "t" is a linear time trend.
a. Use the ADF statistic to test for a stochastic trend (unit root) in In(IP).
b. Do these results support the specification used in Exercise 14.2? Explain.
Data as in Exercise 14.2

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Δ1nUR) : 0.061 + 0.000041-0.01 81n(IR) + 0.333Aln(IP-) + 0.162aln(IP,-2) (0.024) (0.00001) (0.007) (0.075) (0.055) Date 2000:7 2000:8 2000:9 2000:10 2000:1 2000:12 IP 147595 148650 48.973 148.660 48206 147300 AR Order 6 SSR 29,175 28,538 28393 28391 28,378 28.317