lakis wrote:Guys...think I am getting crazy..Thats what I found in a published paper:

"Nonlinear least-squares estimates of the following equation: i=(1-ρ)(β+γ*p(t)+δ*y(t))+ρi(t-1)

whereiis the Federal Funds Rate,pis forecasted inflation, andyis the output gap. "

First of all, the above model is linear or non-linear???? if its non-linear how do we estimate it in Eviews??

Much appreciated

The model can be equally well fit as a linear model. The intercept will be (1-ρ)β, the coefficient on p will be (1-ρ)γ etc.