The data file E2.txt on has two quarterly, seasonally adjusted U.S. investment series. From these, make the variables, assignment help

1. The data file E2.txt on has two quarterly, seasonally adjusted U.S. investment series. From these, make the variables

• ∇y1 = first differences of fixed investment

• ∇y2 = first differences of change in business inventories.

Use these data series from 1947-1968 only to answer the following questions:

(a) Plot the two series and comment on their stationarity.

(b) Test the hypothesis that ∇y2 does not Granger cause ∇y1.

(c) Estimate a VAR(p) for these data.

(d) Estimate the relevant impulse responses over 8 quarters. Report related measures of uncertainty and interepret the impulse responses.