Non-linear Functions of Non-Stationary Data Can be Stationary

I was at a conference the other day, and Peter Phillips made the comment that if we take the Sine or Cosine of a non-stationary time-series, then the Dickey-Fuller test will suggest that the transformed series is stationary. More specifically, this happens if the sample size is large enough.

That got me thinking, and searching, and eventually I came across a paper by Chien-Ho Wang and Robert M. de Jong (see the reference below). Indeed, they establish precisely the result that Peter was referring to.

Counting the Flowers - Again!

We're at it again! The annual (city of) Victoria Flower Count runs from today until 4 March. 

I attacked addressed this horticultural icon in a very early post on this blog a couple of years ago, and again last year. Basically, the flower count is an excuse for the people of this town to poke fun at those who live (?) in the real part rest of Canada. We remind them that while they're still attacking the snow and ice with a shovel and pick, we're picking the flowers that have already begun to bloom.

Here's my prediction for this year:

 1,475,588,000 blooms (forecast standard error = 2,257,716,000 blooms !)

 See the EViews workfile in the "Code" page for this blog for details.

© 2013, David E. Giles