In my post on modeling the Kansas economy, Rick Stryker takes me to task for modeling the Palmer Drought Severity Index (PDSI) for Kansas as an I(1) process: I wouldn’t bother with the ADF test, since its null is non-stationarity and it has low power to reject. I would focus on the KPSS, since its … Continue reading The Kansas Palmer Drought Severity Index, Unit Roots, and Snakes in a Room