Var modelling, Macroeconomics

Assignment Help:

However, these results should be approached with due caution. The limitations and problems associated with VAR modelling have been outlined in this paper, therefore these observations should not be used to interpret or analyse any form of policy nor should they be used solely to forecast the impact of future price shocks as much more prior information is required to do so. However the results do provide a solution to the aim and initial problem discussed. There is significant evidence of a negative relationship between an oil price shock and the UK macroeconomy, in one direction.

A further extension to this study might have been to analyse the forecast error decomposition. This may have shown the percentage of unanticipated changes in each of the variables could have been explained by the shocks thus providing a more concrete understanding of exactly how much oil price shocks impact upon the other variables.


Related Discussions:- Var modelling

Explain the problem involved in consumer price index, Q. Explain the proble...

Q. Explain the problem involved in consumer price Index? To explain the problems involved in calculating CPI we consider MP3 players. If you measure the average price of MP3 pl

Exchange rate, what are the types of exchange rate

what are the types of exchange rate

KEYNESIAN CROSS MODEL, In the keynesian cross model, assume the consuption ...

In the keynesian cross model, assume the consuption function is given by C=200=.75(Y-T) and planned investment=100, government purchases and taxes are each of them 100. a) Draw a g

Trade policy - summary, TRADE policy: We are now in a position to sum ...

TRADE policy: We are now in a position to sum up our analysis of India's trade policy. First, India's trade policy has always been very intricately related to India's basic de

Inverse market supply curve, The inverse market demand curve for a good is ...

The inverse market demand curve for a good is p = 100? 0.25Q. the inverse market supply curve for the good is p = 20 + 0.55Q. Calculate the equilibrium price and quantity, consumer

Farmer grows wheat and sells, A farmer grows wheat and sells it to a miller...

A farmer grows wheat and sells it to a miller for $1; the miller turns the wheat into flour and sells it to a baker for $3; the baker uses the flour to make bread and sells the bre

Relate central banks with commercial banks, Relate central banks with comme...

Relate central banks with commercial banks In many countries, the central bank imposes reserve requirements. This means that commercial banks are obliged to hold a certain perc

Change in the level of real gdp, Assume that government purchases decrease ...

Assume that government purchases decrease by $10 billion, with other factors held constant, including the price level. Calculate the change in the level of real GDP demanded for ea

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd