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What are the new trends in VAR analysis?

What are the new trends in VAR analysis?

Management research, especially in the areas like finance and economics is turning out to be more complicated on a daily basis, as the world of business is being encountered with several kinds of new issues, which has not been seen or experienced before. Many students are taking assistance from highly qualified scholars to complete their research studies successfully and within time

Researchers are trying hard to look into the past, so that they can analyze the present situation, and along with that, they can foresee what awaits the industrial world in future. When they try to link the historical events with the present scenario, they generally go for analyzing the time series data. There are more than a few econometric techniques, which can be used for analyzing time series data. Out of all the existing techniques, analysis of causal association seems to be the most popular one among the econometric researchers in finance and economics domains, and while carrying out causal analysis among several variables, they mainly bank upon Vector Autoregressive technique, which is also commonly known as VAR methodology.

With the advent of latest advancements in mathematical techniques, existing econometric techniques are also undergoing a transformation. There are transformations in the VAR method as well. Following are two latest trends in the existing VAR methodology:

  • First one is the VAR with a structural break. While carrying out analysis on time series data, it has been seen that after a certain period or owing to a particular circumstance, trend of the data changes to a great extent. Identification of that phenomenon and incorporation of the same in the form of a dummy variable in the analysis is called VAR with structural break.
  • Sometimes, due to unavailability of data, researchers combine two or more proxy variables and form a factor to carry on the analysis. This technique is called FAVAR.

For more information about reasons behind the preference of researchers in going for new modifications in Vector Autoregressive methodological analysis, kindly browse through the pages of www.dissertationclinic.com.

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