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hello, pls i need help in trying to estimate the yatylors rule regression.
I dont know how to impose the value of b0 b1 and b2 which are 2.5,0.5 and 0.5 respectively. the equation is as thus,
Baserate = 2.5+inflation rate +0.5 (inflationgap) + 0.5(output gap)
pls how do i run this in eviews and how do i get the implied taylors rule interest rates..
Please i would appreciate a timely response

p.s. anybody know any good books for interpreting test results...

Actually, this is a specific type of equation called "identity". One way to incorporate this into EViews is create an Auto-Updating Series. Suppose that in your workfile you have series named infrate, infgap and outgap, then you can type the following in the command line and generate a series named baserate: