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Poor Man's Invertibility Condition

 

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Check if the DSGE model can be rewritten as an infinite order VAR model. This is tested by looking at what Fernández-Villaverde, Rubio-Ramírez, Sargent and Watson (2007) calls the poor man's invertibility condition. In addition, YADA checks if the state variable transition matrix is stable since, when satisfied, this guarantees that the poor man's condition is also a necessary condition.

 

Additional Information

A more detailed description about the poor man's invertibility condition can also be found in Section 11.10 of the YADA Manual.

 

 


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