Model Solution Dynamics

[brennan6738]

Does anyone know if there is a test to determine whether it is best to model a solution in a VAR model as Dynamic or Static? I am modeling some interest rates. I seem to come up with the same forecast for short term rates, but for long term rates the models give me significantly different forecasts. Is this just something you use for judgement? The EViews 6 manual says to do it noth ways, but it does not say which is best.

[EViews Gareth]

This isn't really a decision you should be making. Rarely is there a situation when you need to choose between the two. Perhaps you should do some background reading on the differences between the two in your forecasting textbook.

[eric2010]

I think you should stick with short term rates models as it will give you the result you want.
And try the new EViews 7.