Challenges for Analysis of the Economy, the Businesses, and Social ...

Economic & Business Statistics
where the cyclical component is t = t and the component
TR = tα
+ C(
1)
ε represents the series’ trend, which is a sum of a
i
∑
t
t
48
C B(
L)
ε
deterministic and a stochastic component. This one is satisfying the following
recurrence relation:
TRi = TRi−
1 + α + C(
1)
ε t .
[4]
Using specific methods we analyze the causal relationship that exists between the
two variables. For this purpose we apply the EG (Engel-Granger) test for the initial
data series, for the un-cyclical series and for the corrected inflation rate.
Keywords: NAIRU, cointegration, inflation, unemployment