/**********************************************************
                              Problem 12.1
                  Impulse response functions
***********************************************************/

new;
library pgraph;
graphset;
 
let t=10;                         @number of periods@
let a={0.2 0,1 0.5};      @specification of VAR coefficients@

let e=1 0;                           @unit vector@
z=zeros(2,t);                       @initialization@

/* simulation of the system for t periods */
i=1;
b=a;
DO WHILE i<=t;
    z[.,i]=b*e;
    i=i+1;
    b=b*a;
ENDO;

/* generation of graphical output*/
/*creating a linear trend*/
tt=zeros(t,1); @initialization@
j=1;
DO WHILE j<=t;
  tt[j]=j;
  j=j+1;
ENDO;
begwind;
window(2,1,0);
setwind(1);
     _pcolor=3;
     title("Imp. resp. of y to shock in y");
     xy(tt,z[1,.]');         
nextwind;                               
     _pcolor=5;
     title("Imp. resp. of x to shock in y");
     xy(tt,z[2,.]');
endwind;
 
end;