Houston H. Stokes

1700 E 56th Street # 3001

Chicago, IL 60637

14 May 2001

Mr. Eric Valentine

Publicher Quorum Books

88 Post Road West

P. O. Box 5007

Westport, CT 06881-9990

Dear Eric:

I have been somewhat delayed by the press of teaching and administrative details but I have been working on the revisions of the book Specifying and Diagnostically Testing Econometric Models. I have been using the book in three classes this year and will use it in two classes next. This book is the major reference for B34S® and needs revision. I am beginning to market the B34S® more aggressively and will need copies of this book for that purpose also. The first two editions were 1991 and 1997. For this edition I will again supply complete camera ready copy. My wife, a professional editor, will do the editing. I do ot wish for any kind of advance. Changes include:

  • 100% conversion of all type except output to proportional Times Roman and conversion to Word 2000.
  • Resetting all math.
  • Revisions to all chapters to incorporate the econometric advances and software additions.
  • A major rewrite to chapter 11 regarding nonlinear estimation to show a much wider class of models that can be estimated using the new B34S matrix command.
  • A major new chapter 16 concerning "Programming Mathematical Calculations using the Matrix Command." All the nonlinear estimation material has been moved to chapter 11.
  • Applications of econometric problems that are solved using the matrix command are throughout the book.

The matrix command has required two years to build and represents over 60,000 lines of Fortran plus a 320 page on line manual to discuss its use. This has taken a great deal of time but is paying off. Chapter 16 will only scratch the surface but is needed. This chapter is in draft form at present.

I have moved from Word Perfect to Word 2000. All the index and contents generation needs to be rebuilt after I learn how to do it. I am sure I will be able to master this but am concerned until I get it done.

I appreciate what you have done for me with past books and look forward to getting this book out. I hope to be able to deliver a manuscript by April 2002. I am sending chapter 1-3 and 11 to show you how the book now looks. There will be up to 150 new pages over the last edition.

This spring I have taught using a manuscript The Essentials of Time Series Modeling: An Applied Treatment with Emphasis on Topics Relevant to Financial Analysis which is around 130 pages. This manuscript was very well received in my time series course. I plan many more changes since it is at the level of class notes now. I hesitate to send a rough draft but am doing so for you to see what I have already. I want get Specifying and Diagnostically Testing Econometric Models done first since the books are linked.

The new book is targeted to people interested in applied time series analysis such as those in the financial sector. It is a hands on treatment to the estimation of Financial models. I am not ready to sign a contract on this newer book yet which is now in the "notes" stage but I think it is now appropriate to get a contract signed for the third edition of Specifying and Diagnostically Testing Econometric Models which we discussed in the last letter some time ago.

Sincerely,

Houston H. Stokes