These theoretical exercises for Topic 3 focus on cointegration and error-correction.

The exercise will not be covered during the exercise classes as we have already worked with similar exercises during the lectures.

You can download the exercises below.

The following resources might be useful for solving the exercise:

Video and Review Quiz 3-05: Introduction to Cointegration.
The video defines the concept of cointegration. It is relevant for the first part of Theoretical Exercise 3.3.

Video and Review Quiz 3-06: The Engle-Granger Two-Step Cointegration Analysis.
The video covers the Engle-Granger cointegration analysis. It is relevant for Question 3 in Theoretical Exercise 3.3.