Models

A model in EViews is a set of one or more equations that jointly describe the relationship between a set of variables. The model equations can come from many sources: they can be simple identities, they can be the result of estimation of single equations, or they can be the result of estimation using any one of EViewsâ€™ multiple equation estimators.

EViews models allow you to combine equations from all these sources inside a single object, which may be used to create a deterministic or stochastic joint forecast or simulation for all of the variables in the model. In a deterministic setting, the inputs to the model are fixed at known values, and a single path is calculated for the output variables. In a stochastic environment, uncertainty is incorporated into the model by adding a random element to the coefficients, the equation residuals or the exogenous variables.

Models also allow you to examine simulation results under different assumptions concerning the variables that are determined outside the model. In EViews, we refer to these sets of assumptions as scenarios, and provide a variety of tools for working with multiple model scenarios.

Even if you are working with only a single equation, you may find that it is worth creating a model from that equation so that you may use the features provided by the EViews Model object.