Eviews Forecast

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EVIEWS DEMONSTRATION

This demonstration illustrates the basic features of EViews. It represents a typical application, and is not meant to be a comprehensive description of the capabilities of the program.

In this demonstration, we examine the relationship between the dependent variable, aggregate money demand (M1), and the independent variables, income (GDP), the price level (PR), and short term interest rates (RS). The sample forecasting project takes us through the following steps:

1.importing data into EViews from an Excel spreadsheet
2.examining the data and performing simple statistical analysis 3.using regression analysis to model and forecast a statistical relationship 4.performing specification and hypothesis testing
5.plotting results

Creating a Workfile and Importing Data

The first step in the project is to read the data into an EViews workfile.

Before we describe the process of importing data, note that the demonstration data have been included in your EViews directory in both Excel spreadsheet and EViews workfile formats. If you wish to skip the discussion of importing data and go directly to the analysis part of the demonstration, you may load these data by selecting File/Open/Workfile… and opening the workfile DEMO.WF1.

To create a workfile to hold your data, select File/New/Workfile…, which opens a dialog box where you will provide information about your data. For our example, quarterly data are observed from the first quarter of 1952 to the end of 1996. You should set the workfile frequency to quarterly, and specify the start date 1952:1, and the end date 1996:4. Once you have filled out the dialog, click on the OK button. EViews will create an untitled workfile, and will display the workfile window. The workfile window is described in detail in Workfile Basics, The Workfile Window. For now, notice that the workfile window displays two pairs of dates: one for the range of dates contained in the workfile, and the second for the current workfile sample. Note also that the workfile contains the coefficient vector C and the series RESID. All EViews workfiles will contain these two objects.

The next step is to import data into the workfile. The data for the four variables used in the analysis have been provided in an Excel file named DEMO.XLS. The data in the DEMO.XLS are arranged with each of the four series in columns, with names in the first row, and dates in the first column. To read these data, click on Procs/Import/Read Text-Lotus-Excel…, which opens the file open dialog. Locate the DEMO.XLS file (it should be in your EViews installation directory) and double click on the file name. You can make finding the file a bit easier by choosing to display Excel .xls files from the Files of type combo box.

EViews will open the Excel spreadsheet import dialog. The default settings for order of data, upper-left data cell, and the sample to import should be appropriate for this Excel file. Since the names of the series are in the first row of the Excel file, you can simply enter the number of series, 4, in the Names for series or Number of series if name in file field of the dialog box. Click OK, and EViews will import the four series. These series will appear as icons in the workfile window.

An alternative method of importing the data is to copy-and-paste the data from the Excel spreadsheet directly into EViews. This procedure is described in detail in Importing Data, Copying-and-Pasting.

Verifying the Data

The first thing you should do is to verify that the data have been read correctly. We will create a group object that allows us to examine all four series. Click on the name GDP in the workfile window, and then press CTRL and click on M1, PR, and RS. All four of the series should be highlighted. Now place the cursor anywhere in the highlighted area and double click the left mouse button. EViews will open a popup menu providing you with several options. Choose Open...
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