144

PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA -

A

retain the merit that every instrumental variable used is either
explicitly included in the equation or contributes significantly
to the causal explanation of at least one variable so included.
In practice, there may not be a great deal of difference between
these alternatives and the last one described may then be
optimal (unless it is unavailable because of the degrees of
freedom required).
Whatever variant of our procedures is thought best in practice,
 they all have the merit of using information on the dynamic
 and causal structure of the model in securing estimates.
The use of such information in some way is vital in the estimation
 of economy-wide econometric models where the ideal
conditions for which most estimators are designed are unlikely
to be encountered in practice (%).

(*) The use of the causal structure of the model itself to choose instrumental
 variables as described in the text is closely akin to the methods used
by BARGER and KLEIN to estimate a system with a triangular matrix of coefficients
 of current endogennus variables See [23]

61 Fisher - pag. 60