Issues with knotsmat()

[Valeria Strusi]

Hello! I am using Stata 17, trying to run npregress with the option knotsmat() to estimate and plot linear splines with knots at specific points.

However, from the graph, it is clear that knotsmat() is not working – the lines are very messy and definitely have more than one and two knots (for model 2 and 3, respectively).

Here is my code:

gen gdp_lag = L.gdp
gen debt_lag = L.debt

reg gdp gdp_lag debt_lag // Model (1)
predict gdp_fitted1 if e(sample)

matrix knotsmat_60 = (3 \ 60)
npregress series gdp gdp_lag debt_lag, spline(1) knotsmat(knotsmat_60) // Model (2)
predict gdp_fitted2 if e(sample)

matrix knotsmat_40_80 = (3, 3 \ 40, 80)
npregress series gdp gdp_lag debt_lag, spline(1) knotsmat(knotsmat_40_80) // Model (3)
predict gdp_fitted3 if e(sample)

twoway (scatter gdp debt_lag) ///
       (line gdp_fitted1 debt_lag) ///
       (line gdp_fitted2 debt_lag) ///
       (line gdp_fitted3 debt_lag), ///
       legend(label(1 "Observed") label(2 "Model 1") label(3 "Model 2") label(4 "Model 3")) ///
       ytitle("GDP growth") xtitle("Debt lag") ///
       title("GDP growth and debt/GDP ratio models")

My data looks like this:

* Example generated by -dataex-. For more info, type help dataex
clear
input int year float(debt gdp inflation)
1791  38.61396   5.955335  -.6532725
1792 36.526653   7.259953   2.554585
1793  31.37096   8.078603   5.142333
1794  26.04761  13.131313   9.607142

Could someone kindly advise?

Thank you in advance.