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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