*
* 3.2.2 from pages 21-24
*
open data tablef3-1[1].txt
calendar 1968
data(format=prn,org=columns) 1968:1 1982:1 year gnp invest cpi interest
*
* gnp is in billions and the cpi is based on 100. To get real GNP in trillions we
* need to divide by cpi, then divide by 1000 (to convert billions to trillions)
* and multiply by 100, to correct the cpi base. Combining those means we multiply
* by .1.
*
set rgnp = gnp/cpi*(.1)
set rinv = invest/cpi*(.1)
set trend = t
*
* The cross products of the variables can be computed using the instruction
* CMOMENT. Here, we list the three explanatory variables first, followed by the
* dependent variable. As you read across the first three rows in the printed
* matrix, you'll get the sums in the 3x3 system of equations on page 21
*
cmom(print)
# constant trend rgnp rinv
*
* You can get the cross product matrix of deviations from the mean, by using the
* option "CENTER" on CMOM. The CONSTANT can then be omitted. Note the advice on
* the bottom of Table 3.1 - these aren't going to quite match the numbers that go
* into the calculation of b2 and b3 because those are based upon rounded numbers.
*
cmom(center,print)
# trend rgnp rinv
*
* The elements of this matrix can be obtained by %cmom(i,j) where i is the row
* and j the column. For instance, the byg at the bottom of page 22 can be computed
* by
*
disp "Byg=" %cmom(2,3)/%cmom(2,2)