EViews.com

Hello,
Is it possible solve system of eqautions with VAR?

I have two equations like;
Y = c(0) + c(1)X+ c(2)Z +c(3)M +c(4)N
X= c(5)+ c(6)Y+ c(7)P +c(8)R

Endogenous; X, Y
Exegenous; Z,N,P,R
How should enter the endogenous variable and exogenous variables in VAR?

If I enter the above exogenous and endogenous variables, Eviews gives the solution for all exogenous variables just thinking as a seperate and big equation for each X and Y. For example, Y is only depend on X,Z,M,N, and not depends on P,R. But eviews gives a solution of Y=f(X,Z,M,N,P,R)

Is it possible to get a system solution in VAR; like Y=f(X,Z,M,N) and X=f(Y,P,R)?
Thanks in advance

The only way to estimate that is in a System object, I believe.

Dear Gareth,
Thanks for reply.

Could you please explain how will it be?
I made system object and entered two equations. But there is no VAR option in estimate part. There are least square, gmm etc but no VAR.
Thanks

a VAR is just a series of least squares equations, so you can estimate the system by least squares.

You need to add lags of the variables up to the VAR level you need.
y1= c(1) + c(11)*y1(-1) + c(12)*y1(-2) + ... + c(21)*x1(-1) + c(22)*x1(-2) + ... + ...
and so on and do the same for the second equation according to the structure you need!

An easier way is to use OLS (command: ls) on equation by equation, unless you assume the correlation b/n equations and want to model it!