Need suggestion on Eviews 8 and running VECM in it. For instance, in a bi-variate model, both the variables [example, LY and LKPC ; where LY is output and LKPC is capital per worker. Both are transformed in log-linear form and are found to be I(1) in nature and are co-integrated.
When entering in the VECM specification in the Eviews8 dialog box, should it be entered in levels (LY LKPC) or in first difference form (dLY dLKPC)?
Follow the steps in the videos bellow mentioned. They present proper assessment of VECM using Eviews 7.
http://www.youtube.com/watch?v=MSLNkgyygP0
http://www.youtube.com/watch?v=2wtoSwufJXM
Note that there is no difference between Eviews 7 and Eviews 8 in applying VECM model.
Good luck,
My dear K.Prakash you should put log level variable only in VECM .good kuck
You should put it as level as VECM will automatically convert it into first differenced after estimation.
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