🌍 Week 11 Homework — Feedback

Student: Simone Iudice Assignment: VAR Estimation and Identification

✅ Overall Assessment

Result: ✅ Pass

Outstanding submission. The code is a comprehensive tutorial on VARs, with detailed comments explaining every step, including the theoretical justification for the OLS estimator and the Cholesky identification.

🔍 Task-by-Task Check

Task Description Status Notes
1.1 Data Loading & Cleanup ✅ Correctly loads and transforms data
1.2 Data Transformation ✅ Correctly computes annualized growth rates
1.3 Construct Data Matrices ✅ Correct setup of VAR matrices
1.4 OLS Estimation ✅ Correct matrix OLS estimation
1.5 Extract A1 Matrix ✅ Correct extraction of A1
1.6 Residuals & Sigma ✅ Correct covariance calculation
1.7 Identification (Cholesky) ✅ Correct Cholesky decomposition
1.8 Compute IRFs ✅ Correct loop for IRF generation
1.9 Plot IRFs ✅ Generates comprehensive 3x3 grid
1.10 Save Figures ✅ Saves figures correctly

📈 Technical Implementation

  • Documentation: The code includes extensive comments explaining the math ($X_t = A X_{t-1} + u_t$) and the logic.
  • Interpretation: The detailed “ECONOMIC INTERPRETATION” section at the end is accurate and insightful, correctly identifying the “information effect” / “price puzzle”.

💬 Style & Clarity

  • Educational Value: This code serves as excellent documentation for the method.
  • Structure: Very well structured.

📊 Visual Output Assessment

  • Plots: High-quality 3x3 grid of IRFs.
  • Labels: Detailed titles and labels.

✅ Suggestions for Improvement

  1. None: Excellent work.

🎯 Summary

Perfect submission. The combination of correct code and deep theoretical explanation makes this a standout piece of work.

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