1. Using the FRED (Federal Reserve Economic Data), Collect data on three time series variables that you firmly believe are not related. Be sure to have at least 100 observations on each variable.

(a) Define the variables and mention the data source.

(b) Report summary statistics (mean, SD, max, min, number of obs.) for each variable (in a table).

(c) Estimate four regression models: (i) regress x on y, (ii) regress z on y, (iii) regress z on x, (iv) regress x and z on y (for the 3 variables - use descriptive variable names, for example, if you have unemployment rate as one of the variables then use variable name something like ”unemp”, please do not relabel them y, x and z!).

(d) Now determine whether the variables are stationary or not. Report your findings.

(e) Re-estimate the regressions in part c) using stationary transformations of all the variables irrespective of whether the variables are non-stationary or not.

(f) Briefly compare and contrast the results from c) and e). Which results make sense? Explain.

Data.csv