Re: st: interpretation of impulse response function results

[Muhammad Anees <aneesmkhattak@gmail.com>]

Hi

Quoting from Zhang and Chen (2009) in Ecological Economics who cite
(Koop et al., 1996), one can understand the nature of IRF as "how a
shock to one variable affects another variable
and how long the effect lasts in short run" I hope the citation above
could help further.

Anees
On 14 March 2011 09:54, Yunxian Lu <yunxian.lu@gmail.com> wrote:
> Dear experts,
>
> I have a quick question on the interpretation of the impulse response
> function created by Stata. For example, under the command "irf", on
> page 154 in the Time series manual, using the following command
>
> irf graph oirf, impulse(dln_inc) response(dln_consump)
>
> we graph the oirf. I was wondering what the vertical axis stands for?
>
> On page 155, using the command "irf table oirf, irf(order1 order2)
> impulse(dln_inc) response(dln_consump)", we can display the results.
> How do we interpret these numbers? What does ".004934" mean in the
> context? Is the following explanation correct: Given one standard
> deviation changes in "dln_inc" in quarter t, there are .004934
> standard deviation changes in  "dln_consump" in quarter t? Or both
> variables are measured in their original units instead of standard
> deviation?
>
> Thanks! I really appreciate your help!
>
> Best,
> Yunxian
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-- 
Muhammad Anees
MSc in Economics
The University of Sheffield
United Kingdom

*
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