# Solved – Johansen-Procedure Interpretation (ca.jo)

I am trying to run a Johansen-Procedure in a set of macroeconomic variables (GDP, credit outstanding and industrial production). I am working with them in level.

How should I interpret the following result?

``######################  # Johansen-Procedure #  ######################   Test type: maximal eigenvalue statistic (lambda max) , without linear trend and constant in cointegration   Eigenvalues (lambda): [1]  6.999273e-01  3.188663e-01  1.303763e-01  5.099467e-02 -6.157574e-17  Values of teststatistic and critical values of test:            test 10pct  5pct  1pct r <= 3 |  3.04  7.52  9.24 12.97 r <= 2 |  8.10 13.75 15.67 20.20 r <= 1 | 22.27 19.77 22.00 26.81 r = 0  | 69.82 25.56 28.14 33.24  Eigenvectors, normalised to first column: (These are the cointegration relations)                 pib.l1       pim.l1     pmca.l1   credpf.l1    constant pib.l1       1.000000    1.0000000   1.0000000   1.0000000   1.0000000 pim.l1       3.837837    1.4510004  -1.8089739  -0.5802552  -0.3392558 pmca.l1     -1.521082   -0.7640412  -1.2570908  -1.3764531  -0.6812554 credpf.l1   -0.334400   -0.5162337   0.9390526   0.3000718  -0.1507749 constant  -318.355047 -149.2844982 -37.8967674 -39.9517618 -42.5839669  Weights W: (This is the loading matrix)                pib.l1      pim.l1     pmca.l1  credpf.l1      constant pib.d     0.01887772 -0.20780832 -0.02013903 0.03625849  1.835250e-14 pim.d    -0.04717478 -0.24886913 -0.01666137 0.03942148  4.796621e-14 pmca.d    0.05566538 -0.03881974 -0.01206322 0.11316466 -9.723535e-15 credpf.d  0.02345645 -0.08972929 -0.20632548 0.12360292  2.783076e-14 ``

My goal is to estimate the best VEC model so I can forecast those variables.

Thank you very much!

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