**Historical Notes and Applications**: (coming soon)

**Mathematical Model:**

These are the primitive equations in the Vector Autoregression Model (VAR)

** ***Primitive Equations: *

Next, write the above equations in matrix-vector notation:

To simplify the notation and calculations the following substitutions and notations will be generated:

The substitutions into can help write equation 1 and 2 in matrix-vector notation:

The formula for the vector x is composed of the the formula for B inverse, including this formula for the inverse in our calculations we get the final version of the vector x in the Vector Autoregression Model:

Using the above formula for the inverse of be we get the final vector:

**Numerical Example:** (Coming soon)

### Like this:

Like Loading...