EViews.com

Hi,
I have a doublt. Hope you will be able to help me. I am writing the steps. But, I am not so sure whether it is right?

Conditional forecasts:

(a) Make a model of the VAR

Ans: let's say there are 3 varialbes IP, M1, TB3. Do the var regression and solve the model. Save it as base scenario.

(b) Delete the equation for Money Supply (M1) from the model=Make the money supply exogenous

Ans: Simply right click and delete it in eviews so that in variable window it would show exogenous

(c) Solve the model in sample

Ans: Then solve the model with the remaining two variables

(d) Create new scenario

Ans: Now in view windwow will click scenario and will select scenario1

(e) Increase money supply by 10% (in comparison

to baseline) in period 2000Q1 to 2006Q4

Ans: Now I will increase the money supply by 10 %

M1=M1*1.10 (in the override window and subsequently in the command window genr M1=M1*1.10)

(f) Solve the model in that scenario

Ans: Now I will solve the system. Here lies my doubt. While solving I will solve taking all the equations or still M3 is exogenous that means I will solve the two equations. How to do that in eview? I am confused.

Please help.

Aryan

I'm not certain that I understand what exactly you are trying to do here. I will note that you can use excludes in a model object to make endogenous variables exogenous for the purpose of solving the system of equations. This is discussed in the documentation.