This approach has several advantages in comparison to Structural VARs. First, this model doesnít use identiÖcation assumptions and the sensitivity of the results to them (see for example Evans and Marshall (1998) where three di§erent empirical strategies are used). Second, it seems well suited in the European context around the founding of the ECB due to the common policy framework that could be deÖned by the same information set (ie a short term interest rate and two series for ináation and economic activity), the same goals of monetary policy but with possible shifts in the perception of monetary policy goals or in the level of these variables. As.
