PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28 
sources of variability of the endogenous variables, the variables 
which the system has for purpose to explain. 
As to the second point, I feel sure we see the J? quotient in the 
same light, inasmuch as it is only a slight modification of Professor 
THEIL’s coefficient of inequality, J? being more similar to the 
Fisherian F ratio. The J? is designed to exploit the information 
obtained when a model is confronted with past observations on the 
one hand, and future comparisons between forecasts and actual 
developments on the other, and it is clear that if there is no model 
such information is not available. 
In his third and last point, Professor THEIL expresses relation 
B,) in words. We note the sharp contrast relative to model (A), 
which in general implies 
(C} 
E (y|y, 3) # 8 y + T7 
The respecification (B,) - (B,) gives a clearcut answer to those 
questions which I have seen as obscure issues in my studies into 
the rationale of multi-relation models. I would fain to repeat that 
the respecification (B,) - (B,) dates only from a few years ago; 
see Ref. 13, Theorem 10, also Ref. 12, remark 3.2.26. In a first 
phase of my studies, Refs. 23, 34, a main theme was the comparison 
between recursive (also known as causal chain) systems and inter- 
dependent systems (A), a key point being that while recursive 
systems have a form that is directly amenable to a causal inter- 
pretation of behaviour relations and individual parameters, this is 
not so for interdependent systems (A). This first phase includes the 
joint attempt with R. Strotz, Ref. 18, to provide a causal inter- 
pretation for the individual parameters of interdependent systems 
(A). In a second phase, Refs. 27-30, my approach was to specify 
the models in terms of conditional expectations, called eo ipso pre- 
dictors, or briefly predictors. One type of model considered, called 
CCC (conditional causal chain) systems, was a straightforward 
2] Wold - pag. 60