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Commentary on a method for testing resistance to shocks
1Centre for Financial Econometrics, Faculty of Business and Law, Deakin University, 221 Burwood Highway, Burwood, Victoria 3125, Australia.
Abstract:
This note tours the Narayan (2020a: Has COVID-19 Changed Exchange Rate Resistance to Shocks?) approach to testing for resistance of a time-series variable to shocks. We take a step-by-step account of this approach and demonstrate its applicability with respect to the crude oil price.•The approach entails steps (1) to (8), as outline in the paper.•Future researchers will find this method useful in evaluating the resistance of variables to not only COVID-19 shocks but to any shock which has had a sufficiently long life.
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