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Hi, I am new here and I am wondering about something related to SEM and 2SLS.
I have 3 equations,
co=c(1)+c(2)*pi+c(3)*pilagged+c(4)*W

I=c(5)+c(6)*pi+c(7)*pilagged+c(8)*klagged

W1=c(9)+c(10)*x+c(11)*xlagged+c(12)*time

and all the appropriate data for them. These are actually the Klein model 1.
What I dont know is how to put these 3 equations in eviews for estimation.
I chose Proc>Define System.
I am confused but I know I should put in the dependent variables box Co,I and W1,
On regressors and AR terms what do I put in common coefficients and Equations coefficients + what do I put in Instrument list in order to estimate the equations by 2SLS ?

Is this the appropriate course of action? If not what should I do to estimate them?
Is there anything else I should mention?

I have looked on google and then here but there is nothing that can help me,
Thank you very much for your time andreas

You're probably best off not using the Proc->Define system dialog, and just writing the system out by hand.


I actually have a program that does the Klein model:

I wrote this,

system untitled

untitled.append co=c(1)+c(2)*pi+c(3)*pi(-1)+c(4)*W @ c pi(-1) k(-1) x(-1) time w2 g

untitled.append I=c(5)+c(6)*pi+c(7)*pi(-1)+c(8)*k(-1) @ c pi(-1) k(-1) x(-1) time w2 g

untitled.append W1=c(9)+c(10)*x+c(11)*x(-1)+c(12)*time @ c pi(-1) k(-1) x(-1) time w2 g

untitled.tsls

but I keep getting the message my system is not defined.
the variables have a different name but are correct.

thank you for your help

You can't create a system called "untitled"

system AA

AA.append co=c(1)+c(2)*pi+c(3)*pi(-1)+c(4)*w

AA.append i=c(5)+c(6)*pi+c(7)*pi(-1)+c(8)*k(-1)

AA.append w1=c(9)+c(10)*x+c(11)*x(-1)+c(12)*time

AA.tsls

show AA

thats what I wrote. the system I chose from object>new object>system and named it AA.
I keep getting either system is not defined or the other error near singular matrix.

What do I have to do step by step in order to get the 2SLS procedure for the 3 equations above ?

I am sorry but I am deeply confused.

Thank you for your help gareth

If you have already created a system called AA, then you don't need the first line of that code.

If you're getting a singular matrix error, then, in all likelihood, you've specified the system incorrectly somehow.

system AA

AA.append co=c(1)+c(2)*pi+c(3)*pi(-1)+c(4)*w

AA.append i=c(5)+c(6)*pi+c(7)*pi(-1)+c(8)*k(-1)

AA.append w1=c(9)+c(10)*x+c(11)*x(-1)+c(12)*time

AA.tsls

show AA

thats what I wrote. the system I chose from object>new object>system and named it AA.
I keep getting either system is not defined or the other error near singular matrix.

What do I have to do step by step in order to get the 2SLS procedure for the 3 equations above ?

I am sorry but I am deeply confused.

Thank you for your help gareth

Where is your instrument list?

I did it after so many hours of trying. Now I have a different question.
The system remains the same , and I am in OLS
CO=C(1)+C(2)*PI+C(3)*PI(-1)+C(4)*W

I=C(5)+C(6)*PI+C(7)*PI(-1)+C(8)*K(-1)

W1=C(9)+C(10)*X+C(11)*X(-1)+C(12)*TIME

I press the residuals button but I only the get the graph for residuals. I need the lines for actual and fitted values as well.
I have searched the manual but I couldn't find an something. I have E-views 6 Student Version.
Suppose I know the intsrument list as well for 2SLS how do I get the actual and fitted values in that ?

Thanks a lot for your help up to now

I did it after so many hours of trying. Now I have a different question.
The system remains the same , and I am in OLS
CO=C(1)+C(2)*PI+C(3)*PI(-1)+C(4)*W

I=C(5)+C(6)*PI+C(7)*PI(-1)+C(8)*K(-1)

W1=C(9)+C(10)*X+C(11)*X(-1)+C(12)*TIME

I press the residuals button but I only the get the graph for residuals. I need the lines for actual and fitted values as well.
I have searched the manual but I couldn't find an something. I have E-views 6 Student Version.
Suppose I know the intsrument list as well for 2SLS how do I get the actual and fitted values in that ?

Thanks a lot for your help up to now

Since you are doing 2SLS there is no reason to use a system. You can just do each equation separately using the TSLS command.

I did it after so many hours of trying. Now I have a different question.
The system remains the same , and I am in OLS
CO=C(1)+C(2)*PI+C(3)*PI(-1)+C(4)*W

I=C(5)+C(6)*PI+C(7)*PI(-1)+C(8)*K(-1)

W1=C(9)+C(10)*X+C(11)*X(-1)+C(12)*TIME

I press the residuals button but I only the get the graph for residuals. I need the lines for actual and fitted values as well.
I have searched the manual but I couldn't find an something. I have E-views 6 Student Version.
Suppose I know the intsrument list as well for 2SLS how do I get the actual and fitted values in that ?

Thanks a lot for your help up to now

Proc->Make Residuals.

Hi Gareth
When i run your program on the Klein model above, I get a near singular matrix in "DO-S.TSLS"
What could be the problem?

Runs for me. Is your copy of EViews up to date?

Hi Gareth,

I am using eViews 7. Are you using the same version. Thanks for the feedback. What does near singular matrix in DO_S.TSLS. Is there some collinearity of the data series that is the cause of this besides the Eviews version I am using.

Chung Tin Fah

Check the build date under help->about EViews.

Hi Gareth

It reads Enterprise Edition- Dec 4 2009 build