I am writing my thesis and I am quite desperate :( It's about exchange rate estimation if that helps. The variables are economic variables and the relationships are determined from economic theory.
I want to estimate the following structural equations.
iq = C(10)+ C(11)*nfp+ C(12)*kq+ C(13)*intr+ C(14)*reer
cq2= C(20)+ C(21)*kq+ C(22)*dq+ C(23)*intr+ C(24)*thrift
tbq= C(30)+ C(31)*reer+ C(32)*cq2_1+ C(34)*cq2_1+ C(34)*tot
restricted by this gentleman: cq+iq+tbq+scnq=1
exogenous variables: nfp kq intr reer dq thrift tot cq2f_1
endogenous iq tbq cq2
So I am trying to set up my VEC in eviews7 and it never works the way I want it to. It mixes up my complete system. For example when I open the representations tab I see this. Is that supposed to be that way? I want to restrict this, otherwise there is no point in setting up a structure in the first place.
Code: Select all
VAR Model - Substituted Coefficients:
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D(IQ) = - 1.0809961458e-15*( IQ(-1) - 5.14782138888e+14*TBQ(-1) + 0.413928772461*CQ2(-1) + 1.22902104996e+12*@TREND(78) - 1.01445152258e+13 ) + 0.0920327684782*D(IQ(-1)) + 0.104678457628*D(IQ(-2)) + 0.267839463978*D(TBQ(-1)) - 0.106031406935*D(TBQ(-2)) + 0.324870278003*D(CQ2(-1)) + 0.0441768126741*D(CQ2(-2)) + 0.11089785552 + 0.00577510945205*@TREND(78) - 0.163374996404*NFP + 0.0297403435768*KQ + 0.0377537280741*INTR - 3.55940519022e-05*REER + 3.04447098753e-08*DQ - 1.19882916889*THRIFT + 9.48130365663e-07*TOTI have looked through the eviews user manual, but it doesn't really help me. If you have a nice (understandable please :)) tutorial on how to set up such an VEC I'd appreciate it as well.
I am an economics student and I am so stuck in technicalities, hence totally lost and confused I have also very limited observations (32 per variables, but that it is inherent in the problem and cannot be changed). If you tell me that my model is completely c**p that'll be helpful as well (as long as you can explain it to me).
Thanks,
Claus