JAN P. A. M. JACOBSa AND KENNETH F. WALLIS

SUMMARY
The structural vector autoregression (SVAR) and simultaneous equation macroeconometric model (SEM)
styles of empirical macroeconomic modelling are compared and contrasted, with reference to two models
of the UK economy, namely the long-run structural VAR model of Garratt, Lee, Pesaran and Shin and
the COMPACT model. Various styles of impulse response analysis are also compared and contrasted, and
used to illustrate model properties. A ‘reverse engineering’ procedure is used to infer long-run relations of
COMPACT comparable to the GLPS cointegrating relations. Copyright  2005 John Wiley & Sons, Ltd.