FORECASTING WITH VAR AND VARIABLES IN LOGS

[ageorgantos]

Hi. I am trying to forecast some variables (i.e. LRGDP etc.) which are used in logs. So, i run the VAR/VEC and i follow the steps (i.e. proc, make model etc...)

If i run the model from the start with "real" values (such as $) in order for the farecasts to be in $ too, then I obvliously will have biased results...

Although I Know how to apply the forecasting procedure, my problem is that i want the forecasting values to be in USD and not in logs!

Can you please help me how can I generate values in $, in case the employed data which are used to run the VAR are in logs?

Thank you in advance.

[EViews Gareth]

The model will solve for X, even if the equation specification has log(X).

[ageorgantos]

Thank you for the immediate anwer!

However, the employed data were transformed in logs from the excel and inserted in eviews as "foreign data". When I run the forecasts for the relevant forecasting period (i.e. 2012-2020) the generated data are still in logs!!!

I would be much obliged if you could expand on your answer indicating the necessary steps (after the VAR model calculation with an emphasis on the forecasting steps) because I am in the dark..in order to help you understand my problem I run the following steps: proc, make model, solve, solution sample:2012 2020, ok.

The generated values at "_0" are still like.... "1.12, 1.36 etc." which I assume are "the log forecasts"...I would expect them to be like... 564,654,598.65 (in $)

Thank you for the patience.

[ageorgantos]

Thank you very much for the help! I found the mistake...it was just what you suggested...I guess i need a break!!