| Abstract: | In this paper a range of unit root and cointegration tests are applied to the time-series variables most commonly found in the various specifications of the Australian wage equation. We find a contradiction between the standard Dickey-Fuller (DF) tests and the results from Johansen estimation regarding the order of integration. The conclusion we reach using tests developed by Perron (1989,1990) is that all the variables are trend stationary processes and that the cointegration framework is inappropriate in this case. |
