To avoid the spurious regression problem, we follow the procedure suggested by Wooldridge (2009) and first detrend
the dependent variable and all of the continuous independent variables.
2); and, (ii) using a GAM (reported below) to detrend
for climatic effects.
I first detrend
all variables with their corresponding growth factors to render the model stationary.
Aforementioned studies often add a linear time trend to an AR(2) to detrend
First, we filter the "raw" data to detrend
and smooth the original series by Fourier's transformation.
That distinction, in turn, depended on how they detrend
and how they weight the roughly 200 time-series variables.
Thus, in order to avoid problems of spurious regression, we decided to detrend
the time series of unemployment rates before using it in the VAR estimations.
In each case, we express the town data relative to (two sets of) comparator data, detrend
the resulting ratio, and then examine the temporal differences in the responses of the detrended
A second-order polynomial was used to detrend
1992), we detrend
the raw trading volume series, [RTV.
From here on, we detrend
the relevant variables by the technical progress [Z.
The essence of his methodology is to detrend
the original series with an allowance for a structural break and to conduct tests for unit roots in the detrended