Hi everyone,
I am currently estimate an equation using GMM but the Eviews say Singular Matrix. Now I have been researching online and in forum but all the solutions was not applicable for me as I have removed variables that is highly correlated (0.4) and still not able to solve it.
This is the equation I was estimating:
This is the correlation table:
I have also attached my workfiled.
In my GMM estimation box:
Equation:
c(1)*dinf - (1-c(2))*(1-c(3))*(1-c(3)*c(4))*marginalcost - c(3)*c(4)*expected_inflation
Instrument list:
dinf(-1) dinf(-2) dinf(-3) dinf(-4) spread outputgap commodityinflation wageinflation
I really appreciate your help as I have been stuck with this for quite a while and this is really important step for my thesis.
Thank you
GMM estimation error: Singular Matrix
Moderators: EViews Gareth, EViews Moderator
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GMM estimation error: Singular Matrix
- Attachments
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- thesis (1).wf1
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Re: GMM estimation error: Singular Matrix
Hi. How it’s going everyone? Can anyone help a poor grad
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- Posts: 4
- Joined: Mon Jul 29, 2019 5:28 am
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- Non-normality and collinearity are NOT problems!
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- Joined: Wed Sep 17, 2008 2:25 pm
Re: GMM estimation error: Singular Matrix
It looks like you are trying to estimate four coefficients with only three right=hand side variables.
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- Posts: 4
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Re: GMM estimation error: Singular Matrix
startz wrote:It looks like you are trying to estimate four coefficients with only three right=hand side variables.
Hi startz,
The paper is used to replicate the model also used that equation, but I have doubt that my equation in eviews is correctly correspond to that in the paper. Is it because i have more c(x) than the variables? should I add more variables?
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- Non-normality and collinearity are NOT problems!
- Posts: 3775
- Joined: Wed Sep 17, 2008 2:25 pm
Re: GMM estimation error: Singular Matrix
Yes, the problem is you have more coefficients than variables.
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