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# PS10.9, for Example 10.7
open data10-5
genr time
# For testing for random walk, first generate lagged variables
lags uswage calwage
# next generate differences and their lags
genr duswage = diff(uswage)
genr dcalwage = diff(calwage)
lags duswage dcalwage
# lag of duswage is not defined for 1960 and 1961, start with 1962
smpl 1962 1994
# carry out F-tests for random walks
ols duswage 0 time uswage_1 duswage_1
omit time uswage_1
ols dcalwage 0 time calwage_1 dcalwage_1
omit time calwage_1
# For cointegrating regression, reset sample range to the beginning
smpl 1960 1994
ols calwage 0 uswage
# save residuals, generate their lags, and differences in lags
genr ut = $uhat
genr ut1 = ut(-1)
genr diffut = diff(ut)
lags 4 ; diffut
# suppress the first five observations
smpl 1965 1994
ols diffut ut1 diffut_1 diffut_2 diffut_3 diffut_4
# compare shortcut command
smpl 1960 1994
coint 4 calwage uswage