🌍 Week 11 Homework — Feedback

Student: Pablo Romanella Assignment: VAR Estimation and Identification

✅ Overall Assessment

Result: ✅ Pass

Solid submission with correct implementation. The code correctly estimates the VAR model and identifies the shocks using the Cholesky decomposition. The results are correctly interpreted.

🔍 Task-by-Task Check

Task Description Status Notes
1.1 Data Loading & Cleanup ✅ Correctly loads and handles data
1.2 Data Transformation ✅ Correctly computes annualized growth rates
1.3 Construct Data Matrices ✅ Correct setup of LHS and RHS 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: Uses efficient matrix operations for the OLS estimation.
  • Correctness: The implementation of the VAR logic is flawless.

💬 Style & Clarity

  • Cleanliness: The code is compact and easy to read.
  • Naming: Standard variable names used.

📊 Visual Output Assessment

  • Plots: Clear subplots for the three variables’ response to the interest rate shock.
  • Labels: Correctly labeled axes and titles.

✅ Suggestions for Improvement

  1. Generalization: The IRF calculation is specific to the rate shock (shock 3). Generalizing it to calculate all shocks would be a good exercise.

🎯 Summary

Good job. The submission meets all the requirements and produces the correct results.

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