1. 1. Error Correction Model And Its Application To Agricultural Economics Research. Presenter Aditya K.S., PALB (1094) Sr. M.Sc. (Agricultural Economics) Major Adviser: Dr. T.N. Prakash Kammardi2. 2. Flow of presentationConcepts and definitions.Cointegration.Residual based test for cointegration.Johansen’s cointegration test.Introduction to ECM.Engle – Granger two step ECM.Market integration of Arecanut in Karnataka state: An ECM approach.Final outcome.Concluding remarks.References. Department Of Agricultural Economics, 2 Bangalore3. 3. Concept and definitions Department Of Agricultural Economics, 3 Bangalore4. 4. Stationary v/s non stationary• If a time series is stationary, its mean and variance remain the same no matter at what point we measure them; That is, they are time invariant. Department Of Agricultural Economics, 4 Bangalore5. 5. Figure 1: Monthly prices of Arecanut in Mangalore from 2005 to 2011 Department Of Agricultural Economics, 5 Bangalore6. 6. Pure Random WalkRandom Walk with Drift Department Of Agricultural Economics, 6 Bangalore
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