The model to estimate is :
Surplus primaire ti= a1 surplus primaire ti-1+a2 debti-1+…..+eit.
When i run the unit root test i found thant all the variables are stationary expect the variable debti-1 where is I(1).
Then If I estimate this model :
surplus primaire ti= a1 surplus primaire ti-1+ a2 ∆debti-1+…..+eit.
It means I differentiate the debt variable .
My question :this latter specification can be validated .
My second question also if this variable is I(2) .
if I differentiate “two times” can also the specification hold ?
Thank you for your help .
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