Study week on the econometric approach to development planning

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Monograph

Identifikator:: 1824422792

URN:: urn:nbn:de:zbw-retromon-217476

Document type:: Monograph

Title:: Study week on the econometric approach to development planning

Place of publication:: Amsterdam [u.a.]

Publisher:: North-Holland Publ. Co. [u.a.]

Year of publication:: 1965

Scope:: XLVII, 1259 S.; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Dynamic structure and estimation in economy-wide econometric models / FranklinM. Fisher, Massachuetts Institute of Technology - Cambridge, Mass. - U.S.A.

Collection:: Economics Books

22 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA a factor less than unity and the square of another such factor. There is clearly a reasonable sense in which one may be pre- pared to take such terms as negligible at least when compared with the non-zero elements of the first term in the expansion for W(1) which involve only the diagonal elements of A to the first power. If one is willing to do this, then one is saying that the use of endogenous variables lagged one period as instruments in higher-numbered sectors involves only negligible inconsistency at least as compared with the use of the same variables as instruments in their own or lower-numbered sectors. There may be considerable difficulties in accepting such a judgment, however. In the first place, it is well to be aware that there are two different statements involved. It is one thing to say that the effects in question are negligible compared to others and quite another to say that they are negligible in a more absolute sense. If one accepts the stability assumption, then there certainly is a value of 6 beyond which further terms in the expansion of W(1) are negligible on any given standard. These may not be all terms after the first, however: we shall discuss the case in which there are non-negligible terms after the first below. Second (a minor point but one worth observing) even our conclusion about relative importance need not hold although other assumptions are granted. While it is true that as 0 be- comes large the right-hand side of (5.25) approaches zero, such approach need not be monotonic. To put it another way, every element of the matrix involved is a sum of terms. Each such term involves a diagonal element of A to the 8 and a diagonal element of H to the 6 - 1. If all such diagonal elements are less than unity in absolute value, then the absolute value of each separate term approaches zero monotonically as 6 in- creases; this need not be true of the sum of those terms, how- ever, and it is easy to construct counter-examples. Neverthe- less, there is a sense in which it seems appropriate to assume 61 Fisher - pag. 38

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