Panel FM OLS

[Boban7]

Dear all,
I want to analyse the balassa-samuelson effect with the panel fm-ols method.
I have a Panel with 25 eu-countries (n-dimension) and a time-dimension for each country from 1980-2004 (t=25).
Each country had 2 variables p (inflation) and y (productivity).

Country time p y
A 1980 0,4 0,6
A 1981 0,5 0,7
A 1982 0,4 0,3
. .
. .
. .
B 1980 0,2 0,4
B 1981 0,3 0,3
B 1982 0,2 0,4
. .
. .
. .

On estima.com i have found the program from Pedroni for FM OLS, but I realy have no expirience with RATS.

*** USER INPUT SECTION ***


compute Nsecs = 20 ;* cross section dimension, N
compute Tperiods = 100 ;* time series dimension, T
;* -see note below for unbalanced panels
allocate 0 Nsecs*Tperiods ;* set allocate to at least N*T
compute m = 2 ;* number of regressors
compute Tdum = 0 ;* set to 1 to subtract time means, else 0
compute unbal = 0 ;* set to 1 for unbalanced panel, else 0

dec vec bvec(m)
compute bvec = || 0.0, 0.0, 0.0|| ;* null values for slope vector

open data unbal_2.wks ;* read stacked panel data from file
data(org=obs,format=wks) ;* one column of length N*T per variable

dec vec[series] datavec(m+1)
set datavec(1) = x ;* name of LHS variable in data
set datavec(2) = y ;* name of first RHS var in data
set datavec(3) = z ;* name of second RHS var in data
*set datavec(4) = var4 ;* name of third RHS var in data, etc.

dec vec[label] labelvec(m+1)
compute labelvec(1) = 'y' ;* desired label for LHS variable
compute labelvec(2) = 'x1' ;* desired label for first RHS variable
compute labelvec(3) = 'x2' ;* desired label for second RHS variable
*compute labelvec(4) = 'x3' ;* desired label for third RHS variable, etc.

Could someboby tell me more about the programm? It would be of great help!

Regards,
Boban7