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Re: Interpretation of Coefficients in VAR Model

Posted: Tue Oct 16, 2012 7:11 am
by alim
Dear TomDoan

I appreciate your help all the times. I am facing new problems of Interpretation of Coefficients in VAR models. Suppose I have two variables (one dependent and one independent variables). 4 lag lengths are appropriate for this analysis. After analysis, I got 16 coefficients. Please tell me how do I interpret these coefficients?

Thanking you

With Regards
Ali

Re: Interpretation of Coefficients in VAR Model

Posted: Tue Oct 16, 2012 10:29 am
by TomDoan
You don't, at least not directly. VAR's are analyzed based upon their impulse responses, not their lag coefficients.