I was wondering what is the effect of say regressing a dependent variable that has a positive trend with an independent variable that has a downward trend?

Thanks!

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- Sep 23rd 2012, 07:50 PMusagi_killerRegressing trending variables
I was wondering what is the effect of say regressing a dependent variable that has a positive trend with an independent variable that has a downward trend?

Thanks! - Sep 23rd 2012, 08:37 PMMaxJasperRe: Regressing trending variables
Assume regression y=f(x). Now you say y increases as x decreases?

- Sep 23rd 2012, 09:07 PMusagi_killerRe: Regressing trending variables
Sorry what I meant was in a time series context.

Say you have this regression:

$\displaystyle y_t = b_0 + b_1 x_t$ where y_t is a positive trending time series variable and x_t is a negative trending time series data, in general would it be a good idea to add a time trend variable if the dependent variable is upwards trending and the independent variable is downwards trending? Ie, use the regression:

$\displaystyle y_t = b_0 + b_1 x_t + b_2 t$ - Sep 23rd 2012, 09:21 PMMaxJasperRe: Regressing trending variables
- Sep 23rd 2012, 09:56 PMusagi_killerRe: Regressing trending variables
Thanks for that, why would you pick the 2nd one over the first one?