Causality test with panel data

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meitaayutr
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Joined: Tue Jan 18, 2022 6:10 pm

Causality test with panel data

Postby meitaayutr » Wed Jan 19, 2022 6:33 pm

Hi all,
I have a problem running panel data when using Dumitrescu-Hurlin causality test. Why does it say "near singular matrix in unlimited equation for cross section 1". How to solve it? I have only 2 variables.

If the problem is in high collinearity or nearly identical values, then how to remove multicollinearity if my variable is only 2?
Thank you.
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EViews Gareth
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Re: Causality test with panel data

Postby EViews Gareth » Thu Jan 20, 2022 9:56 am

You don't have enough time observations.
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Khethang
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Joined: Fri Nov 03, 2023 2:53 am

Re: Causality test with panel data

Postby Khethang » Fri Nov 03, 2023 11:52 pm

Dear All
Apologies if this question has been addressed before. I am looking at the causality between government expenditure and inflation in panel data using Toda and Yamamoto (1995) causality test. I have seen many blogs e.g. Dave Glides of T-Y causality on time series data but none on panel data. Can someone guide me on the steps to follow on E-views?

Regards,

Khethang


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