Hello,
I want to estimate the impact of one unit deviation of government expenditure (for example 1 dollar deviation) on GDP. When I run the svar model in eviews, the impulse response function indicates the response to one S.D (Standard Deviation) Innovations. My question is how can I transform this result to the response to one unit deviation.
Impulse Response Function
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Re: Impulse Response Function
Hello,
Since you've using an SVAR factorization, the impulse responses are in term of innovations to the structural variables, not the original variables, e.g. government expenditure or GDP. By construction, the one S.D. structural innovations and the one unit structural innovations are identical.
Since you've using an SVAR factorization, the impulse responses are in term of innovations to the structural variables, not the original variables, e.g. government expenditure or GDP. By construction, the one S.D. structural innovations and the one unit structural innovations are identical.
Re: Impulse Response Function
Thank you for your replay
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