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Moreover, the \u201cproblem of fundamentalness,\u201d which is intractable in SVARs, can be solved, provided that the impulse-response functions are sufficiently heterogeneous. We provide consistent estimators for the impulse-response functions and for (<jats:italic>n<\/jats:italic>,<jats:italic>T<\/jats:italic>) rates of convergence. An exercise with U.S. macroeconomic data shows that our solution of the fundamentalness problem may have important empirical consequences.<\/jats:p>","DOI":"10.1017\/s026646660809052x","type":"journal-article","created":{"date-parts":[[2009,6,4]],"date-time":"2009-06-04T08:27:35Z","timestamp":1244104055000},"page":"1319-1347","source":"Crossref","is-referenced-by-count":303,"title":["OPENING THE BLACK BOX: STRUCTURAL FACTOR MODELS WITH LARGE CROSS SECTIONS"],"prefix":"10.1017","volume":"25","author":[{"given":"Mario","family":"Forni","sequence":"first","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Domenico","family":"Giannone","sequence":"additional","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Marco","family":"Lippi","sequence":"additional","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]},{"given":"Lucrezia","family":"Reichlin","sequence":"additional","affiliation":[],"role":[{"vocabulary":"crossref","role":"author"}]}],"member":"56","published-online":{"date-parts":[[2009,10,1]]},"reference":[{"key":"S026646660809052X_ref40","volume-title":"Modern Algebra","volume":"I","author":"van der Waerden","year":"1953"},{"key":"S026646660809052X_ref39","unstructured":"Stock J.H. & Watson M.W. 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