Hi guys. I really do not know if i can ask this question here.  It is not about a grtetl but about time series.<br><br>I am reading book of Vogelang &quot;Econometrics Theory and Applications with EViews.  In chapter 12 he show how to estimate long run models with lag operator and in the end of each example he always assume that L=1 and estimate really easily the final model. I can not understand why he assume that L is equeal to one and not to something else. <br>
For example<br><br>Y_t=C(0)+C(1)*G_t+c(2)*Y_t-1+e_t =&gt;<br><br>(1-c(2)*L)*Y_t=c(0)+c(1)*G_t+e_t=&gt;<br><br>Y_t=c(0)/(1-c(2)L)+c(1)G_t/(1-c(2)L)+e_t(1-c(2)L)<br><br>And here it is always obtained  that L=1.<br><br>Could someone expain why L=1, please?<br>
<br>Thanks.<br>