Hi there,
I am quite new to eviews and I have been trying to estimate a model for my thesis. This model is a PHillips Curve model and I want to put restrictions on previous π_t sum to one.
For more clarification I am posting ym model here.#
π_t=1/4 ( π_(t1)+π_(t2)+π_(t3)+π_(t4) )+α(uu*)t+ε_t
where π_t is annualized quarterly inflation rate
1/4 ( π_(t1)+π_(t2)+π_(t3)+π_(t4) is expected inflation ( expected inflation being an average og past four quarters )
I want my restriction to be that the coefficient of expected inflation to be sum to 1.
Can someone please help me how I command eviews to do this for me! Thank you
placing restrictions on coefficients sum to one
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 Nonnormality and collinearity are NOT problems!
 Posts: 3406
 Joined: Wed Sep 17, 2008 2:25 pm
Re: placing restrictions on coefficients sum to one
Code: Select all
ls pi=c(1) + c(2)*pi(1) + c(3)*pi(2) + c(4)*pi(3) + (1c(2)c(3)c(4))*pi(4)
Re: placing restrictions on coefficients sum to one
but how does that work?
Can I assumer the first set of pis to be a simple moving average model based on past four quarters? and then do the regression?
Can I assumer the first set of pis to be a simple moving average model based on past four quarters? and then do the regression?
Re: placing restrictions on coefficients sum to one
Yes and how can we obtain the coefficient and s.e. of the coefficient thats missing?

 Nonnormality and collinearity are NOT problems!
 Posts: 3406
 Joined: Wed Sep 17, 2008 2:25 pm
Re: placing restrictions on coefficients sum to one
Do a Wald test on 1c(2)c(3)c(4)=0
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