🌍 Week 11 Homework — Feedback

Student: Michele Nascia Assignment: VAR Estimation and Identification

✅ Overall Assessment

Result: ✅ Pass

Correct and concise submission. The code implements the 3-variable VAR correctly and generates the required Impulse Response Functions for the monetary policy shock.

🔍 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 clear plots for the rate shock
1.10 Save Figures ✅ Saves the figure correctly

📈 Technical Implementation

  • Efficiency: The code is compact and uses efficient matrix operations.
  • Correctness: All steps of the VAR analysis are implemented correctly.

💬 Style & Clarity

  • Cleanliness: The code is easy to follow.
  • Naming: Variable names are standard and clear.

📊 Visual Output Assessment

  • Plots: Clear subplots for the response to the rate shock.
  • Titles: Correctly titled plots.

✅ Suggestions for Improvement

  1. Generalization: The IRF calculation could be generalized to compute responses for all shocks, not just the third one, to allow for a full system analysis.

🎯 Summary

Good work. The submission meets the requirements and demonstrates a correct implementation of the VAR model.

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