Full text: Study week on the econometric approach to development planning

causal interpretation in the sense of stimulus-response rela- 
2) The parting of the ways between CC- and ID-systems 
is examined from the point of view of the transition from 
disturbance-free to stochastic relationships in the formal design 
of simultaneous equation systems. While the dualism at issue 
does not exist in disturbance-free systems, it arises in the 
stochastic specification of the models because the rules for 
operating with disturbance-free relations sometimes but not 
always extend to eo ipso predictors. Thus in CC-systems the 
transformation to the reduced form is a matter of iterated sub- 
stitutions such that eo ipso predictors are carried into eo ipso 
predictors, whereas in ID-systems this transformation in general 
is an operation that does not preserve eo ipso predictors. The 
dualism can be removed by a respecification of the behavioural 
relations of ID-systems, namely, by letting those explanatory 
variables that are current endogenous variables be replaced by 
their conditional expectations as given by the reduced form. 
In the resulting systems, calling BEID- (bi-expectational ID-) 
systems, both the behavioural relations and the reduced form 
make eo ipso predictors, and accordingly allow a correspond- 
ing causal interpretation. 
3) In experimental situations the empirical testing of a 
model is essentially a matter of replications under controlled 
conditions. In nonexperimental situations, and in particular 
in macroeconomic model building, no routine techniques are 
available for testing the model with regard to its practical value. 
Here predictive tests are of key importance, that is, follow-up 
studies in which the forecasts obtained from the model are 
confronted with the actual course of the time series that are 
subject to analysis and forecasting. Thus far it is only for 
very few macroeconomic models that such follow-up studies 
have been reported, and a plea is made for the systematic use 
of predictive tests. Reference is made to the Janus quotient, 
a predictive test which is designed as a criterion whether the 
2] Wold - pag. 4

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