This paper considers the implications of the permanent/transitory decomposition of shocks for identification of structural models in the general case where the model might contain more than one permanent structural shock. It provides a simple and intuitive generalization of the in.uential work...

We develop a ten variable structural VAR model of the Australian economy for the period 1980 to 1995. The VAR methodology has not been widely applied in the Australian context, despite its popularity in quantitative macroeconomics internationally.