Set limits on variables to forecast in a VAR model (vars)

I've been using vars to forecast monetary policy variables, one of which is Canada's overnight interest rate. The lower bound for that as per policy is 0.25. How can ensure that the variable does not dip below a value of 0.25 when forecasting?


In general, forecasts from VARs are unbounded. However, there is a "trick" that sometimes works. If the interest rate is y, substitute in the var ln (y-0.25). As the forecast goes to -\infty, you get e^{ln(y-0.25)}=0=y-0.25, or y=0.25.

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