Am 25.04.2016 um 12:44 schrieb Andreas Zervas: But why do you want to have identities for those estimators where they are irrelevant, given a situation where the simulation apparatus is not yet here? Answer : For 2 reasons. Because for example one can simulate a basic macroeconomic model and do the transformations needed to impose the accounting identities, e.g. the GDP identity. A second reason is that I would like to be able to add debt in a fiscal VAR as exogenous (see Favero - Giavazzi AEJEP 2012), and simulate forecasts where debt follows its path dictated by the identity governing its evolution; I can do it on my own for a couple of models, but a general solution is preferable.  (Sven:) (Andreas:) Right, I should have thought of that. Still I would be interested to see a direct comparison between the AB approach there and a competing C model doing the same thing. (It's a bit off-topic here, but if you have literature pointers they would be welcome.) Answer: As the most common C models are Cholesky restrictions, placing government spending first as is customary does not make a big difference with AB models for fiscal policy. But it matters a lot for taxes.  cheers, sven All best, Andreas