%Fiscal policy parameters - these are taken from a estimated SVAR model - %this is a quick solution - these are going to be imported from another %.m-file asap! %The order of these in SVAR: tauy tauc g_gap %the order in SOE : tauk tauy tauc tauw g_gap A0_fis = [ 1 0 0; ... 0 1 0; ... 0 0 1]; B0_fis = [ 0.132418 0 0; ... 0 0.142992 0; ... 0 0 0.414848]; %NOTE: the lag polynomial parameters are reported in reduced form in Eviews, so no need to multiply them... A1_fis = [ 1.574508 0.063984 -0.039498;... 0.036577 0.762311 0.028616;... -0.048547 0.053786 0.562102]; A2_fis = [-0.646174 0.037071 -0.017812;... -0.029465 0.211986 -0.052633;... 0.105095 -0.139486 0.199290]; %Forming reduced form covariance matrix B0_fis = inv(A0_fis)*B0_fis; A1_fis = [rhotauk 0 0 0 0 ;... 0 A1_fis(1,1) A1_fis(1,2) 0 A1_fis(1,3) ;... 0 A1_fis(2,1) A1_fis(2,2) 0 A1_fis(2,3) ;... 0 0 0 rhotauw 0 ;... 0 A1_fis(3,1) A1_fis(3,2) 0 A1_fis(3,3) ]; A2_fis = [0 0 0 0 0 ;... 0 A2_fis(1,1) A2_fis(1,2) 0 A2_fis(1,3) ;... 0 A2_fis(2,1) A2_fis(2,2) 0 A2_fis(2,3) ;... 0 0 0 0 0 ;... 0 A2_fis(3,1) A2_fis(3,2) 0 A2_fis(3,3) ]; B0_fis = [epstauk 0 0 0 0 ;... 0 B0_fis(1,1) B0_fis(1,2) 0 B0_fis(1,3) ;... 0 B0_fis(2,1) B0_fis(2,2) 0 B0_fis(2,3) ;... 0 0 0 epstauw 0 ;... 0 B0_fis(3,1) B0_fis(3,2) 0 B0_fis(3,3) ]; %Foreign economy parameters A0_for = [ 1.000000 0.000000 0.000000;... 0.000000 1.000000 0.000000;... -0.010769 -0.003824 1.000000]; B0_for = [ 0.361489 0.000000 0.000000;... 0.000000 1.991066 0.000000;... 0.000000 0.000000 0.040145]; A1_for = [ -0.046531 0.022421 -1.164048;... 0.048503 0.395765 7.949190 ;... -0.007283 0.004208 1.732721]; A2_for = [-0.059115 0.015450 2.607438;... 0.952415 0.080900 -6.213580;... 0.018174 -0.006530 -0.982994]; A3_for = [ 0.178221 -0.008059 -0.797557;... -0.135283 0.081285 -3.701512;... -0.017685 -0.002386 0.432410]; A4_for = [-0.284973 0.013537 -0.973977 ;... 1.089019 -0.203722 2.857469;... -0.008306 -0.000287 -0.198671]; %Forming the reduced form covariance matrix B0_for = inv(A0_for)*B0_for;