What is a persistent variable?

Question

What is a persistent variable in the context of regression analysis? For example, dividend to price ratio (D/P) is considered to be persistent variable when used to model future returns (Stambaugh Bias literature).

Answer 1

In short, persistence is related to the long-term influence of a shock, e. g. that a one-off shock on the d/p would have an "everlasting" influence on the average return level.