EViews.com

Hi everyone,
I am currently estimate an equation using GMM but the Eviews say Singular Matrix. Now I have been researching online and in forum but all the solutions was not applicable for me as I have removed variables that is highly correlated (0.4) and still not able to solve it.
This is the equation I was estimating:

This is the correlation table:

I have also attached my workfiled.
In my GMM estimation box:
Equation:
c(1)*dinf - (1-c(2))*(1-c(3))*(1-c(3)*c(4))*marginalcost - c(3)*c(4)*expected_inflation
Instrument list:
dinf(-1) dinf(-2) dinf(-3) dinf(-4) spread outputgap commodityinflation wageinflation
I really appreciate your help as I have been stuck with this for quite a while and this is really important step for my thesis.
Thank you

Hi. How it’s going everyone? Can anyone help a poor grad :(

bump

It looks like you are trying to estimate four coefficients with only three right=hand side variables.

It looks like you are trying to estimate four coefficients with only three right=hand side variables.

Hi startz,
The paper is used to replicate the model also used that equation, but I have doubt that my equation in eviews is correctly correspond to that in the paper. Is it because i have more c(x) than the variables? should I add more variables?

Yes, the problem is you have more coefficients than variables.