Full text: Study week on the econometric approach to development planning

to CC-systems (10) is that in CC-systems the reduced form (15) 
differs from the primary form (10), whereas in VR-systems the 
primary form and the reduced form are one and the same 
system (6). 
The following general features of CC-systems will be noted: 
1) The primary form (10) contains one (and only one) 
explanatory relation for each of the current endogenous va- 
2) In the transformation that leads from the primary 
form (10) to the reduced form (15) the current endogenous 
variables can be eliminated from the right-hand members by 
a sequence of iterated substitutions. 
The causal aspect of the substitutional design has given the 
model its name « causal chain system ». To paraphraze, the 
current endogenous variables form a causal chain of the same 
type as in the nursery fad: « The cat on the mouse, the mouse 
on the rope, the rope on the hanged man’s neck. » 
3) Each relation in the primary form and the reduced form 
is an eo ipso predictor subject to raridom disturbance. 
In view of the potential use of the primary form and the 
reduced form for predictive and other inferential purposes, 
3° is a key feature of CC-systems. A model which has pro- 
perty 3° will be called bi-expectational. The bi-expectational 
property of CC-systems is closely tied up with the substitutional 
design 2°, inasmuch as the substitutions at issue are an oper- 
ative procedure that carries eo ipso predictors into eo ipso 
[.3. Interdependent (ID-) svstems. 
A broad class of interdependent systems is covered by the 
following model: 
v,= À y,+B z,+v, 
2] Wold - pag. 10

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