EViews.com

I am have some questions about how to detrend a series with a deterministic trend and how to apply it in Eviews. Can someone check if my process is correct?

Let's say I want to regress a variable Yt on a variable Xt, but Xt exhibits a deterministic trend.

To detrend Xt, I run a regression on a time index variable, TIME. Would my Eviews command would be: ls x TIME

I then obtain the estimated residuals from the above regression, ut. Now do I use this new series, ut as my regressor for my original equation? So I would then estimate the following: ls y c u

I am have some questions about how to detrend a series with a deterministic trend and how to apply it in Eviews. Can someone check if my process is correct?

Let's say I want to regress a variable Yt on a variable Xt, but Xt exhibits a deterministic trend.

To detrend Xt, I run a regression on a time index variable, TIME. Would my Eviews command would be: ls x TIME

I then obtain the estimated residuals from the above regression, ut. Now do I use this new series, ut as my regressor for my original equation? So I would then estimate the following: ls y c u

Almost, the first step needs a constant

Okay. Now the residuals that are obtained are considered the detrended series?

Yep.