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

150 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - en statistical estimation of multirelation models. Assumptions R 2-3 at first sight look very stringent, and in section 2.3 Prof. FISHER argues that they are not likely to be valid for economy-wide econo- metric models. The first point I wish to make is that the narrow stringency of Assumptions R 2-3 is only apparent. They come in a better light if the relations of the systems are specified in terms of eo ipso predictors (an ea ipso predictor is the conditional expec- tation that constitutes the residual-free part of the relation). This type of assumption has the fundamental advantage that it corre- sponds directly to the operational use for which the relations are intended. Furthermore, R 2-3 become automatically satisfied as an implication, not as an assumption, and this implication in its turn implies that the relations can be consistently estimated by least squares regression, (#) The theory of eo ipso predictors has shed new light on the much-discussed question about the operational significance of the structural relations of ID-systems. With reference to my report to the Study Week for details of the argument, it can be shown that the clearcut cause-effect interpretation of the behavioural relations of CC-systems does extend to ID-systems, but only at the price of a respecification of the system. For example, if the ID-system involves a behavioural relation which specifies the elasticity of in- vestments with respect to profits as 0.4, the respecified assumption will be that 0.4 is the elasticity of savings with respect to expected profits. Actual profits and expected profits are different notions, conceptually and observationally; the actual profits are given by the statistical data, whereas the expected profits in the present context are given by the reduced form of the ID-system. The snag is that expected profits as derived from the reduced form stand in no ob- vious connection with expected profits in the sense of psychological anticipation. The respecification of the ID-system thus involves an element of arbitrariness. The point just mentioned has a bearing upon the doubts that Prof. FISHER expresses in section 2.3 about the matrix triangularity in Assumption R 1. When Prof. FISHER states that it is somewhat 6] Fisher - pag. 66

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