Figure 4 depicts the analogous impulse response functions
for the period before the imposition of the capital controls in the last quarter of 2008.
Also while dealing with the impulse response function
, we do not report the error bands, as our focus is on the directions of the impacts and the differences of the impacts when a particular channel is alternatively opened and blocked.
(1) Impulse Response Function
. In order to analyze dynamic effects of the model responding to certain shocks as well as how the effects are among the three variables, further analysis is made through impulse response function
and variance decomposition based on VECM, and the results for 10 periods are obtained.
First, impulse response function
(IRF) shows that productivity variation has appeared as a long-term phenomenon exhibiting a long run effect on FDI flows, which returns to baseline values in the long-run.
The relationship also ecthablished in impulse response function
where the response of economic growth to interest rate is decreaing over period.
In light of the wavelet packet energy spectrum theory , the energy of a virtual impulse response function
component [E.sub.j] can be expressed as follows:
Then impulse response function
is used for surveying the effects of shocks of exchange index on the growth rate of value added of agriculture sector.
We describe in the following how to approach this issue for the case of impulse response functions
, which are key objects in the toolkits of time series econometricians.
To see the overall effect of a shock to growth in energy production on growth of energy imports and exports over the forecast horizon, the cumulative orthogonalized impulse response function
is shown in Charts 6 and 7.
This is done by calculating the attenuated impulse response function
[h.sub.a](P,t), when the inverse Fourier transform is applied to the calculated impulse response function
in the frequency domain H(i[omega]), multiplied by the attenuation function [A.sub.atte](P,i[omega]) (4)
where g(t) is called the impulse response function
or the transfer function of the system that relates the input to the output.