Proof of the Stationarity Condition for an AR(1) Process (|φ| < 1)
Students often struggle to fully grasp why is not just a sufficient condition, but a necessary one for a unique stationary solution. They might also misattribute properties of white noise (e.g., normality) as prerequisites for wide-sense stationarity, when only its first two moments and lack of autocorrelation are essential.
Institutional Reference: Time Series Analysis
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