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fmramos
Posts: 92
Joined: Fri Sep 19, 2008 7:30 am
Location: Sao Paulo / Brazil
Contact:

Hi! I'm a Brazilian user of EV.

I have a model with some equations and identities. The format is something like:

eq1 = f (X1, X2, X3)+e1
eq2 = f(Y1, Y2, Y3)+e2

I'd like to add the restriction/identity:

eq1=eq2

And, of course, cov(e1,e2)<>0.

But I can't add 'eq1=...' twice (recognized as endogenous by the model specification). The problem is analogous to the demand and supply problem.

Someone has any idea how can I proceed?

Fabio

startz
Non-normality and collinearity are NOT problems!
Posts: 3519
Joined: Wed Sep 17, 2008 2:25 pm

fmramos wrote:Hi! I'm a Brazilian user of EV.

I have a model with some equations and identities. The format is something like:

eq1 = f (X1, X2, X3)+e1
eq2 = f(Y1, Y2, Y3)+e2

I'd like to add the restriction/identity:

eq1=eq2

And, of course, cov(e1,e2)<>0.

But I can't add 'eq1=...' twice (recognized as endogenous by the model specification). The problem is analogous to the demand and supply problem.

Someone has any idea how can I proceed?

Fabio

you might try creating a series

Code: Select all

`series z = 0`

and then adding as an identity in the model

Code: Select all

`z=eq1-eq2`

But I haven't tried it.

fmramos
Posts: 92
Joined: Fri Sep 19, 2008 7:30 am
Location: Sao Paulo / Brazil
Contact:

Yeah. Tks for the idea. I confess that i already thought about it. But it works only 'a little'. The model'll forecast a value to the next steps different than zero (but close to)... So, the two sides will still be different. But I think that's the better until now...

This solution is useful, but in fact is a deterministic restriction 'converted' into a stochastic one, I think.

Tks again anyway!,

Fabio