Kizspy | Question: 5
(Choose 1 answer)
What is the main advantage of using an equilibrium correction model (ECM) over a simple regression model?
A. ECM allows for the inclusion of lagged dependent variables.
B. ECM accounts for the presence of cointegration between the variables.
C. ECM provides a better fit to the data than other models.
D. ECM is less sensitive to violations of the classical assumptions.
