structural Var with long run restriction
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Hello, I am looking at CKM codes about BQ. http://users.cla.umn.edu/~erm/data/sr364/bquah/ir.m i could not understand this part in below. What does it tell me exactly? If hours in level, alpha equals to zero. so, all equation is zero. it does not make sense to me.
hrsz(i,1) = (alpha.^[i-1:-1:0])*X2(1:i,2)*100;
sehz(i,:) = (alpha.^[i-1:-1:0])*se2_2(1:i,:)*100;
I would be very appreciated if you could explain that to me. best
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