SEMAINE D'ETUDE SUR LE ROLE DE L ANALYSE ECONOMETRIQUE ETC.
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where the vector
(19)
y it Ji
is formed by current endogenous variables in such manner that
for any specified : the variable y, may or may not occur in y,,
and mav occur twice or more: and where
20)
a, 4
— i
that is, matrix A is such that the relation for y,, does no
involve this variable in the right-hand member.
System (18) is the primary (or structural) form of the model.
Regarding the primary form (18) as a system of implicit rela-
tions for determining the current endogenous variables, and
solving for these variables in terms of predetermined variables,
we obtain the model in reduced form,
(21)
R z,-
wm,
where
(22a-b)
RK=—l
A
y IB: w="
and where we assume that the relations make eo ipso predictors
for the current endogenous variables.
(23)
Ew, IR z)=R
We note the following general features of interdependent
systems (18):
1) The primary form (18) contains as many relations as endo-
genous variables;
2) The matrix (I - A) 1s nonsingular.
21 Wold - pag. 11