Time-series Econometrics (Short essay question)
1. Describe how the Durbin Watson test in conducted and how the value of 2.0 is used when conducting D-W tests.
2. Explain why we need to use (tau)-test statistics, rather than t-test statistics in the D-F unit root tests
3. When and how so-called spurious regressions take place in time-series econometrics.
4. Describe the Engle-Granger cointegration test procedures in a bivariate case.