IMPACTSIGNFLIP Procedure

@ImpactSignFlip is used to correct the signs of columns in a factor of a covariance matrix when the signs themselves may not be identified by the process of computing the factor. For instance, @ShortAndLong computes a factor based upon patterns of short- and long-run restrictions. Those are all zero restrictions, which means that for any factor, you can sign-flip any column(s) and still satisfy all those zero restrictions. To fully identify the model, you need to normalize the sign in each column, typically by signing the impact on a particular variable.

@ImpactSignFlip(options) factor signs

Parameters

factor	(input and output) RECTANGULAR factor matrix
signs	VECTOR[INT] as described below.

Description

signs is a VECTOR[INT] with values +/- the variable (by position) on which you want to normalize the impact sign in the corresponding column. For instance, if you have a model which creates "aggregate supply" and "aggregate demand" (in order), that would usually be interpreted as meaning a positive impact on output. If the first variable in the model is output, this will make sure that the signs match that interpretation:

@ImpactSignFlip bqfactor ||+1,+1||

If the variables are GDP and inflation in order, and the first shock is supply (impact positive on GDP) and the second shock is contractionary monetary (negative impact on inflation), you would use

@ImpactSignFlip factor ||+1,-2||