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Impulse Responses

 

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Calculate the responses of the observed variables or the state variables from the structural shocks at initial or posterior mode parameter values. The impulse responses are computed under the assumption of fixed beliefs for each time period. Since the beliefs are updated over time, the impulse responses will typically change over time, as the graph below demonstrates. They may also be compared with the impulse responses based on the rational expectations solution of the model.

The responses can be calculated for the original observed variables, using the annualization data from the data construction file, or the levels information from the same source. In addition, impulse responses can be computed for the state variables.

 

Additional Information

A more detailed description about impulse responses under adaptive learning can also be found in Section 17.7 of the YADA Manual.

 

 


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