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quadratic trend and linear trend

Posted: Fri May 27, 2016 8:19 am
by chrispusch
HI all,

please help me estimating the output gap according to following regression equation.
Y(t)= a + b*t+ c * t^2 + u
y is the gdp at time t
t is a time trend i.e. the number of observations
and u is the error term and will be the output gap

I have already estimated the output gap with the help of the HP filter and want to employ this method next, but can not figure out how to get this regression into eviews.
I have 184 estimations of gdp.

thanks in advance for your help.

kind regards
chris

Re: quadratic trend and linear trend

Posted: Fri May 27, 2016 8:41 am
by EViews Gareth
Which part are you having difficulty with?

Re: quadratic trend and linear trend

Posted: Fri May 27, 2016 8:44 am
by chrispusch
I understand the equation, but I don't know how to estimate it in eviews.
basically, if I open the window "estimate equation" where would I go from there?

Re: quadratic trend and linear trend

Posted: Fri May 27, 2016 9:30 am
by EViews Gareth
Enter the name of your dependent variable, followed by

Code: Select all

c @trend @trend^2

Re: quadratic trend and linear trend

Posted: Fri May 27, 2016 9:48 am
by chrispusch
Thank you Gary, very quick reply and very helpful!!!


If I run the regression, should I use HAC to account for heteroskedasticity and autocorrelation, or is this not necessary in this case?

thanks in advance!