DYNAMIC STRUCTURE AND ESTIMATION
IN ECONOMY-WIDE ECONOMETRIC MODELS

FRANKLIN M. FISHER (*)
Massachusetts Institute of Technology - Cambridge, Mass. - U.S.A.

.. INTRODUCTION

ND CLASSIVICATION OF ESTIMATORS

1.1. General Introduction

This paper is concerned with the techniques of and the
problems in the structural estimation of economy-wide econometric
 models. Briefly stated, the essential general features
of such models which raise special problems for estimation are
as follows. They tend to involve a large number of equations
and variables; they are nearly closed in the sense that most of
the variables of the model are endogenously determined; they
are dynamic and essentially interconnected in the sense that,
considered as dynamic systems, they are indecomposable; finally,
 the disturbances from different equations tend to be correlated
 with each other and with their own past values. All of
these features will be discussed at greater length below, and all

(*) This paper was largely written during my tenure of a National
Science Foundation Postdoctoral Fellowship at the Econometric Institute
of the Netherlands School of Economics. I am indebted to T. J. ROTHENBERG
for helpful conversations and to L. R. Krein and E. Kun for criticism of
an earlier draft but remain responsible for errors. The paper forms part
of mv contribution to the Brookings-SSRC econometric model project.

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Fisher - pag.