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st: IRF order identification interpretation

From   Paul Zhang <>
Subject   st: IRF order identification interpretation
Date   Mon, 14 Jan 2013 17:01:28 +0100

Dear Statalisters,

I have a question regarding how to interpret the graphs that are
generated with the VARBASIC command. For example, say that I have
estimated the following vector autoregression:

VARBASIC y x, lag(1/1)

In the resulting IRF graphs, is x deemed to be causally prior to y or
is y deemed to be causally prior to x?

If I reversed the order (i.e., ran VARBASIC x y, lag(1/1) or used the
ORDER command to specify a second order) would I be making the
opposite assumption? Since I am new to STATA, any reference or
resource that delves into this in detail would be greatly appreciated.

Thank you in advance,

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