🌍 Week 11 Homework — Feedback

Student: Sofia Bruga Assignment: VAR Estimation and Identification

✅ Overall Assessment

Result: ✅ Pass

Correct implementation of the VAR model. The submission correctly estimates the VAR, identifies the shocks, and plots the Impulse Response Functions. The code also includes an initial OLS estimation for the Phillips Curve as a preliminary step.

🔍 Task-by-Task Check

Task	Description	Status	Notes
1.1	Data Loading & Cleanup	✅	Correctly loads and processes data
1.2	Data Transformation	✅	Correctly computes annualized growth rates
1.3	Construct Data Matrices	✅	Correct setup of matrices for VAR estimation
1.4	OLS Estimation	✅	Correct OLS estimation of the VAR coefficients
1.5	Extract A1 Matrix	✅	Correct extraction of the dynamic matrix
1.6	Residuals & Sigma	✅	Correct calculation of covariance matrix
1.7	Identification (Cholesky)	✅	Correct use of `chol(Sigma, 'lower')`
1.8	Compute IRFs	✅	Correct iterative computation of IRFs
1.9	Plot IRFs	✅	Generates plots for the monetary policy shock
1.10	Save Figures	✅	Saves the figure correctly

📈 Technical Implementation

VAR Estimation: Correct implementation.
Identification: Correctly applies Cholesky decomposition.
IRF Generation: Correct loop for generating IRFs.
Stability Check: Includes a useful check for the eigenvalues of the A1 matrix to ensure stability.

💬 Style & Clarity

Code Structure: Clear and logical flow.
Comments: Code is well-commented.
Cleanliness: The code is tidy and easy to read.

📊 Visual Output Assessment

Plots: Clear plots for the response of all variables to the interest rate shock.
Labels: Proper labeling of axes and titles.

✅ Suggestions for Improvement

Interpretation: Adding some comments interpreting the results (e.g., the reaction of inflation and GDP) would enhance the submission.

🎯 Summary

Good work. The code is correct and implements all the necessary steps for the VAR analysis. The addition of the stability check is a good practice.

Grade Level: ✅ Pass (10/10 tasks correct)