Can I trust a regression if variables are autocorrelated?
Both variables (dependent and independent) show autocorrelation effects.
When I run the regression residuals appear not to be correlated.
My durbin-watson statistic is greater than upper critical value, so there is an evidence that error terms are not positively correlated. Also when I plot ACF for errors it looks like there is no correlation there and Ljung-Box statistic is smaller than critical value.
Can I trust my regression output, are the t-statistics reliable?