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.

where h(t) is the

impulse response function of the system and E denotes the expected value of a random quantity.

In light of the wavelet packet energy spectrum theory [30], 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.