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Fast Posterior Sampling in Tightly Identified SVARs Using 'Soft' Sign Restrictions

Matthew Read, Dan Zhu

arXiv 28 Mar 2026 · Econometrics

arXiv:2603.27088 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We propose algorithms for conducting Bayesian inference in structural vector autoregressions identified using sign restrictions. The key feature of our approach is a sampling step based on 'soft' sign restrictions. This step draws from a target density that smoothly penalises parameter values that violate the restrictions, facilitating the use of computationally efficient Markov chain Monte Carlo sampling algorithms. An importance-sampling step yields draws conditional on the 'hard' sign restrictions. Relative to standard accept-reject sampling, the method substantially speeds up sampling when identification is tight. It also facilitates implementing prior-robust Bayesian methods. We illustrate the broad applicability of the approach in an oil-market model identified using a rich set of sign, elasticity and narrative restrictions.

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61
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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Amir-Ahmadi, P. and T. Drautzburg (2021) Identification and Inference with Ranking Restrictions1.00074100%
2Baumeister, C. and J. D. Hamilton (2024) Advances in Using Vector Autoregressions to Estimate Structural Magnitudes1.00053100%
3Kilian, L. and D. P. Murphy (2012) Why Agnostic Sign Restrictions Are Not Enough: Understanding the Dynamics of Oil Market VAR Models1.00053100%
4Giacomini, R. and T. Kitagawa (2021) Robust Bayesian Inference for Set-identified Models0.94613685%
5Giacomini, R., T. Kitagawa, and M. Read (2022) Robust Bayesian Inference in Proxy SVARs0.92843100%
6Neal, R. M (2003) Slice Sampling0.92843100%
7Antolín-Díaz, J. and J. F. Rubio-Ramírez (2018) Narrative Sign Restrictions for SVARs0.8947471%
8Montiel Olea, J. L. and J. Nesbit (2021) (Machine) Learning Parameter Regions0.8746367%
9Baumeister, C. and J. D. Hamilton (2015) Sign Restrictions, Structural Vector Autoregressions, and Useful Prior Information0.8434375%
10Giacomini, R., T. Kitagawa, and M. Read (2023) Identification and Inference under Narrative Restrictions, Reserve Bank of Australia Research Discussion Paper No 2023-070.8434375%

Showing the top 10 of 62 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Inference in Tightly Identified and Large-Scale Sign-Restricted SVARs0.84333