My two variables are GDP and inflation rate and the former is I(0) and other one I(1). So I need to estimate ARDL Model. As GDP is influenced many factors other than inflation, so I will be grateful if someone help me how to include control variables in eviews for ARDL estimation.
I think E-views has a section for exogenous variables, try putting them there
Hi,
The ARDL bounds testing approach is employed to test the long-run ... Real GDP and Foreign reserves were also added to the models as control variables. ... of national income and relative prices but did not include the exchange rate. ...... ARDL models evaluated by Eviews and the final selected mode ..
Kindly refer thos link:
http://www.eviews.com/help/content/ardl-Autoregressive_Distributed_Lag_(ARDL)_Models.html
I believe that the rate of GDP growth and the level of inflation correlate in the sense that high inflation leads to low GDP growth (or even its absence), because in this case, a high inflation tax is levied, which reduces business activity
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