Your Textbook So Far Considered Variables for Cointegration That Are

question 12

Essay

Your textbook so far considered variables for cointegration that are integrated of the same order. For example, the log of consumption and personal disposable income might both be I(1)variables, and the error correction term would be I(0), if consumption and personal disposable income were cointegrated.
(a)Do you think that it makes sense to test for cointegration between two variables if they are integrated of different orders? Explain.
(b)Would your answer change if you have three variables, two of which are I(1)while the third is I(0)? Can you think of an example in this case?

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Definitions:

Emotional Reactivity

The extent to which individuals respond emotionally to stimuli or events, including the intensity and duration of those emotional responses.

Prefrontal Cortical Activity

Neural activity in the prefrontal cortex of the brain, associated with complex behaviors such as decision making, social interaction, and impulse control.

Positive Affectivity

The state or trait tendency to experience enthusiasm, alertness, joy, confidence, and determination.

Positive Well-being

A state of good mental and physical health, happiness, and life satisfaction.