Differential Coefficients in Error Correction Model | Econometrics
Differential Coefficients in Error Correction Model [Degree of Differentia] Disequilibrium and Correction in Short Run] Once the cointegration [long run equilibrium] between two variables is established, the impact of qualitative variable on first differenced dependent variable [ΔYt or ΔXt] can be examined in error correction model [ECM] to mainly know the degree of differential disequilibrium between short run and long [...]