Unformatted text preview: money supply. a. Interpret the coefficient estimates for the VAR model. b. Test the hypotheses i) output causes money, and ii) money causes output. c. In conducting the impulse response analysis, consider the effects of a unit shock to output and, then, a unit shock to money. Interpret your result. d. Report and interpret the forecast error variance decomposition for both the output and money variables....
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- Winter '09
- Economics, Variance decomposition, VAR model, bivariate VAR