Lag length criteria, Macroeconomics

Assignment Help:

Lag Length criteria

VAR Lag Order Selection Criteria

 

 

 

 

Endogenous variables: OIL EXCH R RPI LUNEMP GDP 

 

 

 

Exogenous variables: C 

 

 

 

 

Date: 04/10/12   Time: 09:40

 

 

 

 

Sample: 1980Q1 2011Q4

 

 

 

 

Included observations: 90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Lag

LogL

LR

FPE

AIC

SC

HQ

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0

-1297.398

NA 

 152838.1

 28.96439

 29.13105

 29.03160

1

-629.2589

 1232.345

 0.121419

 14.91686

 16.08344

 15.38730

2

-546.9702

 140.8050

 0.043857

 13.88823

  16.05473*

  14.76189*

3

-502.2073

 70.62590

 0.037065

 13.69350

 16.85992

 14.97039

4

-469.5335

 47.19560

 0.042007

 13.76741

 17.93376

 15.44753

5

-424.0268

 59.66430

 0.037071

 13.55615

 18.72242

 15.63950

6

-377.6019

 54.67826

 0.033616

 13.32449

 19.49068

 15.81106

7

-312.0832

 68.43057

 0.021261

 12.66852

 19.83464

 15.55832

8

-247.3143

  59.01173*

  0.014906*

  12.02921*

 20.19525

 15.32223

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 * indicates lag order selected by the criterion

 

 

 

 LR: sequential modified LR test statistic (each test at 5% level)

 

 

 FPE: Final prediction error

 

 

 

 

 AIC: Akaike information criterion

 

 

 

 

 SC: Schwarz information criterion

 

 

 

 

 HQ: Hannan-Quinn information criterion

 

 

 

 

 

 

 

 

 

 

Fig - Table of Lag Order Selection Criteria from Eviews

From Fig it can be seen that the AIC statistic minimises at a lag length of 8. Therefore, according to Akaike, this should be the lag length which is used in the VAR model. However it can also be seen that the SC and HQC both minimise at the lag length 2. As the lag length 2 satisfies more than one criterion, and therefore the majority of criteria assessed in this paper, this length will be chosen.This length should produce the best goodness of fit for the VAR model.


Related Discussions:- Lag length criteria

Threaten the formal right to give blood, Singer suggests that although the ...

Singer suggests that although the right to sell blood does not threaten the formal right to give blood, it is incompatible with "the right to give blood, which cannot be bought, wh

As-ad model with inflation, The AS-AD model with inflation When we remo...

The AS-AD model with inflation When we remove assumption of constant prices to allow varying real wages. Resulting model was known as AS-AD model. Similarly we now remove the a

Own price elasticity of demand, Suppose the own price elasticity of demand ...

Suppose the own price elasticity of demand for good X is -5, its income elasticity is 2, its advertising elasticity is 4, and the cross-price elasticity of demand between it and go

Factors affecting the price elasticity of demand, Q. Discuss about the fact...

Q. Discuss about the factors affecting the Price Elasticity of Demand. a. Availability of Substitute- Availability of close substitute is important determinants of elasticity of

Liberalisation and changing sectoral composition of fdi, Liberalisation and...

Liberalisation and Changing Sectoral Composition of FDI: The latest is the ICT wave that has influenced the global shift in service industries the most. Therefore, these  flow

Liberalisation of capital account and convertibility issue, Liberalisation ...

Liberalisation of Capital Account and Convertibility Issue: Broadly speaking and irrespective of sector specificity, a liberalised system is one where the role of the governme

Country personal consumption expenditures, If in some country personal cons...

If in some country personal consumption expenditures in a specific year are $50 billion, purchases of stocks and bonds are $30 billion, net exports are $-10 billion, government pur

Economic theory helps society, Do you agee or disagree " Economic theory he...

Do you agee or disagree " Economic theory helps society reach economic goals that it has selected for itself?" Justify your answer.

What do you mean by the long run outcome, Imagine a firm with the same cost...

Imagine a firm with the same cost structure but in each of the four market structures: Competitive, Monopolistically Competitive, Oligopoly, and a Monopoly. Using the concepts of c

Determination of price level, P and Y are both endogenous variables and acc...

P and Y are both endogenous variables and according to the quantity theory of money we need P.Y = constant. If we divide both sides by P we get Y = constant / P. Because Y = Y D i

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd