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(a) Briefly outline Johansen's methodology for testing for cointegration between a set of variables in the context of a VAR. (b) A researcher uses the Johansen procedure and obtains the following test statistics (and critical values) r λmax 5 % critical value 0 38.962 33.178 1 29.148 27.169 2 16.304 20.278 3 8.861 14.036 4 1.994 3.962 Determine the number of cointegrating vectors. (c) 'If two se
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