The methodology developed by Sims (1980) is build upon the estimation of a VAR
model and assigns responsibility for fluctuations in the variables of the VAR. It is specified
a time interval where the evolution of the time series under consideration is plotted and the
contribution of each variable included in the system of equations comprising the VAR for
the cyclical behavior is analyzed. The technique of historical decomposition is easily
explained by means of the VAR’s moving average representation,