Stationarity refers to a property of a time series where its statistical characteristics, such as mean and variance, remain constant over time. In a stationary time series, fluctuations around the mean do not change, making it easier to analyze and predict future values. This concept is crucial in fields like economics and finance, where understanding trends and patterns is essential. There are two main types of stationarity: strict and weak. Strict stationarity means that the entire distribution of the series remains unchanged over time, while weak stationarity only requires that the mean and variance are constant, and the covariance between observations depends only on the time difference, not on the actual time points.