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extra explanatory variable in DCC-Garch model

Posted: Mon May 07, 2012 4:14 am
by sana
Dear all,

I would like to estimate a DCC garch model and to impute an exogenous variable in only the second variance equation.

If I use « xregressors », the extra explanatory variable ‘TMM’ will be automatically added in both variances equations

garch(p=1,q=1,nomean,xregressors,method=bfgh, hseries=ht2) / spot future
# TTM

Thank you very much in advance for your help!

Re: extra explanatory variable in DCC-Garch model

Posted: Mon May 07, 2012 10:23 am
by TomDoan
You'll have to use MAXIMIZE for any model that doesn't give the same structure to all the variance equations.