Problems Caused by Stochastic Trends Include All of the Following

question 25

Multiple Choice

Problems caused by stochastic trends include all of the following with the exception of

• A)the estimator of an AR(1)is biased towards zero if it's true value is one.
• B)the model can no longer be estimated by OLS.
• C)t-statistics on regression coefficients can have a nonnormal distribution, even in large samples.
• D)the presence of spurious regression..

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