If two variables x and y both are I (1) and also integrated in the long run, then the error correction model (ECM) for x and y is written as [[DELTA].
What does ECM stand for?
ECM stands for Error Correction Model
This definition appears very frequently and is found in the following Acronym Finder categories:
- Science, medicine, engineering, etc.
See other definitions of ECM
We have 365 other meanings of ECM in our Acronym Attic
- Épidémiologie Clinique et Médecine (French: Clinical Epidemiology and Medicine)
- Episcopal City Mission (Massachusetts)
- Equipment Condition Monitoring
- Equity Capital Market
- Equivalent Current Method
- Eric Carle Museum (Massachusetts)
- Erosion Control Mat
- Error Checking Mode (fax)
- Error Correction Mechanism (economics/trade)
- Error Correction Mode
- Error Covariance Matrix
- Erythema Chronicum Migrans
- Espace Cadres Marseille (French retirement association)
- Espace Culture Multimédia (French: Multimedia Espace Culture)
- Essentials of Clinical Medicine (various schools)
- Estonian Centre on Medicines
- Étude et Conception Mécanique (French engineering company)
- Euro Carreaux Matériaux (French tile company)
- European Christian Mission (various nations)
- European Cities Monitor (survey)
Samples in periodicals archive:
Subsequently, the asymmetric error correction model (AECM) is a logical generalization of equation (2) by way of incorporating appropriate lagged values of both the dependent and independent variables in the form (4) (3) [MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII] where c is the intercept, di and fi are regression coefficients, and [e.
Unit Root Tests The first step in error correction model is to determine whether the variables under consideration are stationary or not since most macro economic variables are not stationary, that is, they tend to exhibit a determine and/or deterministic and/or stochastic trend.
In the case of level relationships based on the bounds test, conditional Granger causality tests should be carried out under the vector error correction model (VECM).
05 percent level Table 7: Results of the error correction model for Canada, France, Germany, Italy, and U.
Error correction model The equilibrium relationship does not always occur between variables when the two variables are cointegrated.
We then use an error correction model to search for any evidence that the Russian leaks can be related to short-run changes in CSO decisions about inventory, the quantity of carats sold, or the diamond price and find that only inventory appears to have been affected by the leaks.
Smith, 2000, Structural Analysis of Vector Error Correction Models with Exogenous I(1) Variables, Journal of Econometrics, 97: 293-343.