Creating a shock

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aleksey73
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Joined: Fri Jun 03, 2011 8:19 am

Creating a shock

Postby aleksey73 » Mon Jul 11, 2011 12:49 pm

Hello,

I have a model forecasting the oil price that I built using add factors. I would like to simulate a shock of a suddent 10$ rise in 2011Q4.

What I did is, for the sample 2011Q4 to 2020, I had 10$ to the value of my add factors, then I put the sample back to 2000 to 2020.
After I solve the model and I was expecting to have a constant 10$ difference between my baseline and actuals values, but i had a non constant difference going from 8$ to 15$...

So, I was wondering if there was an other way to solve the model to be sure that we'll get a 10$ difference between the baseline and actual values.

Thank you!

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