Hallo everyone, may you please assist me on this.
I am doing analysis to check the impact of GDP and Inflation on Unemployment rate in my country, i test for UNIT ROOT using ADF test and my data is stationary at first difference except for GDP which is stationary at second difference, now after making my variable stationary do i need to regress it?
Because when when i regress it through STATA, all my variable become Insignificant, R-squared become too low and My F-statistic become Insignificant? what should i do!
Thank you very much in advance.
Suleyman Abas You should take log of your variables then apply unit root tests on your data. I hope your GDP will become stationary at 1st Difference. I don't know about time span of your analysis, but as these variables are in time series so simple OLS will not work here. I suggest you to read
1. Applied Econometrics Time Series 4th edition by Walter Enders .
2. Damodar Gujarati and Dawn Porter's Basic Econometrics (5th ed)
3. Stock and Watson's Introduction to Econometrics (there are many others)
These books will help you in understanding time series.
Yadawananda Neog Thank you very much Sir, actually am using a period of 27yrs from 1991 to 2017, let me apply the log and see
And I will pass through the book you mentioned, thank you so much for the reply
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