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Posted: **October 13th, 2010, 1:05 pm**

HiIf I am using the Error correction model, I know I must have a set of cointergrated variables.But why they must be conintergrated?Sorry for such a newbie question!Thanks!

Posted: **October 13th, 2010, 1:57 pm**

Your error correction term needs to be stationary for the regression to make sense.