# VAR models in R: Constant, Trend, Constant+Trend, None

I currently apply a VAR models with the vars package in R. There are the options to select "both", "none", "trend", or "constant".

I searched a little but I didn't find conclusive evidence to know what "const" exactly means.

I found this plot and I'm curious, whether "const" means "cycle", also sometimes described as "drift"?

"trend" should be clear as a time series that is trending up- or downwards is trending. I assume most economic time series to be either constant+trend or constant?

• I was going through my old answers and noticed this one was not accepted. Do you perhaps need further clarification? Feb 24 '17 at 14:12

## 1 Answer

I found this plot and I'm curious, whether constant means "cycle", also sometimes described as "drift"?

type=const would include an intercept in the model equations.
I do not see how that could mean "cycle".
It could be interpreted as the drift term if the data supplied to the VAR function is a multivariate time series in first differences (rather than levels).

I assume most economic time series to be either constant+trend or constant?

It is hard to generalize, but I guess you are right (if you mean a VAR with a constant or constant+trend, not just constant or constant+trend). But I am sure it is possible to find some examples where other options make more sense.