Hi Marius,
In my opinion, it shouldn't be corrected. Regressing on inflation is quite enough. Basically, in macroeconomics analysis, excepting the growth theory, we're mainly interested on relationship between nominal variables (the quantity of stuff) not real (the value of stuff). Otherwise, having in the same model the consumer price index beside the inflation rate may be somewhat troublesome since they should be highly correlated.

Cheers,
Artur

Mariusz Doszyń a écrit :

Hello...

This question is not connected directly with gretl but I'll be grateful for your opinions. I've estimated panel data models for mainly UE countries with consumption, gross savings, invstments and money supply (M1) as dependent variables and income, interes rates, consumer prices index and time variable as an independent variables. Should all theses variables be corrected with restpect to inflation rates? Or maybe it's better idea to put inflation rate as an independent variable? Many keynesian economists used to analylize nominal variables...

Thanks in advance for your help...

Best wishes...

Mariusz

Poland
_______________________________________________
Gretl-users mailing list
Gretl-users@lists.wfu.edu
http://lists.wfu.edu/mailman/listinfo/gretl-users