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I am trying to test the linearity = interdependence or the non-linear (contagion) between Asian countries during the Asian crises using the fluctuation of the exchange rate.

Is it relevant to use the Deming regression to see if the relation between the two variables (ex:Thailand-Indonesia) are linear or non linear ?

Thank you !

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  • $\begingroup$ It is not clear to me what you are attempting to achieve. If you are looking to assess the linear vs non-linear dependency of two random variables, I suggest you have a look at this very instructive thread: quora.com/… $\endgroup$ – Quantuple May 19 '16 at 21:56

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