The Biggest Conceptual Difference Between Using VARs for Forecasting and Using

Multiple Choice

The biggest conceptual difference between using VARs for forecasting and using them for structural modeling is that

A) you need to use the Granger causality test for structural modeling.
B) structural modeling requires very specific assumptions derived from economic theory and institutional knowledge of what is exogenous and what is not.
C) you can no longer use the information criteria to decide on the lag length.
D) structural modeling only allows a maximum of three equations in the VAR.