diff --git a/doc/bvar-a-la-sims.tex b/doc/bvar-a-la-sims.tex index adf350ea6..f910515ca 100644 --- a/doc/bvar-a-la-sims.tex +++ b/doc/bvar-a-la-sims.tex @@ -550,10 +550,12 @@ The syntax for computing impulse response functions is: The \textit{identification\_scheme} option has two potential values \begin{itemize} -\item \texttt{'Cholesky'}: uses a lower triangular factorization of the covariance matrix (default) -\item \texttt{'SquareRoot'}: uses the Matrix square root of the covariance matrix +\item \texttt{'Cholesky'}: uses a lower triangular factorization of the covariance matrix (default), +\item \texttt{'SquareRoot'}: uses the Matrix square root of the covariance matrix (\verb+sqrtm+ matlab's routine). \end{itemize} +Keep in mind that the first factorization of the covariance matrix is sensible to the ordering of the variables (as declared in the mod file with \verb+var+). This is not the case of the second factorization, but its structural interpretation is, at best, unclear (the Matrix square root of a covariance matrix, $\Sigma$, is the unique symmetric matrix $A$ such that $\Sigma = AA$).\newline + The mean, median, variance and confidence intervals for IRFs are saved in \texttt{oo\_.bvar.irf} \section{Examples}