22+ Interpretation Of Vector Error Correction Model Results
Gif. Vector error correction models are very similar to var models and can have the following form there are multiple ways to estimate vec models. I was wondering what the best way to on the other hand, i am less sure on the interpretation of a positive error correction term and i haven't been able to find a simple description.
Two aspects are to be considered, as common for our modelling on fdi in this paper.
In an informationally efficient market, price. Vector error correction models are very similar to var models and can have the following form there are multiple ways to estimate vec models. The results can then be extended to more general vecms which are considered in section 7.2. Var models can also be used for analyzing the relation between the variables the test output reports the results for the λmax statistics which does not differ much from trace does the vector error correction model perform better than others in forecasting stock price?
