Still in GiveWin and prior to formulating a general dynamic regression model one can examine the series in more detail graphically, with correlograms, histograms and spectrum plots as well as simple time series plots and cross-plots (scatter diagrams) with simple linear regression lines plotted on them if you wish. You can also create QQ plots which allow you to see how close the distribution of a variable is to normality by showing its transformed cumulative distribution together with that for the normal which appears as a straight line. The properties of these graphs can be edited if required, for example by changing the colour or appearance of plotted lines, adding text or changing the position of the legends shown to identify each series.
Up to 32 graphs can be viewed together in a single GiveWin graphics window and the size of the window itself can be varied by changing the settings in the Working View dialog box. Graphs may now be saved in four formats: WMF(Windows Meta File), EMF (Enhanced Windows Meta File – Windows 95 and Windows NT only), EPS (postscript) and GWG ( a new special GiveWin graph type). The first three can be imported into appropriate software or printed directly. The last is not recognised by any other software but can be loaded back into GiveWin. PCX files are no longer created nor recognised. I sought further explanation from Jurgen Doornik as to why these changes had been made. He replied that the move to a Windows environment provided the ideal opportunity to progress from the old bitmapped graphics such as PCX to a vector graphics standard. However although the Windows vector graphic formats (WMF or EMF) and the postscript files are fine for printing or exporting to another program, neither stores sufficient information for further editing. The new GWG format addresses this issue. The outcome is certainly a major advance in the quality and manipulabilty of the graphics in PcGive.
To conduct unit root tests (or to examine other descriptive properties of the series) one must next switch to the PcGive window. Unit root (ADF) tests may be conducted with constant, trend and seasonals present and the dialog box allows you to set the highest lag length for the lagged differences. Appropriate critical values for the tests are automatically generated by the program and sent to the GiveWin window with the estimated ‘t’ and ‘F’ values.
Once you are ready to proceed to the dynamic regression analysis select Model and Formulate (Alt + Y or the special formulate icon) and the Formulate Model dialog box opens. Figure 2 illustrates the structure of the dialog box with the available variables in the database shown in the right hand list with those selected to be included in the model shown on the left. The endogenous variable in the regression is marked with an E. When selecting variables to include in the model one can set up a default lag to use for all variables or, by marking Query at the bottom right of the dialog box set the desired lag length separately for each variable.