SEMAINE D'ÉTUDE SUR LE ROLE DE L’ANALYSE ECONOMETRIQUE ETC. 123

where the prime in y’, indicates that when the vector y, serves
as an expectational condition for the variable v,,, this variable
is deleted in the vector, and where

(14)

a.;

=

1

=I. ....0n: k=t.1+71, .... n).

To state (14) in words: the matrix A is subdiagonal in the
sense that all elements in and above the main diagonal are zero.
System (10) is called the primary (or structural) form of the
model (4). Thanks to the subdiagonal design of the matrix A
the current endogenous variables y,, can be eliminated from
the right-hand members of the primary form (10) by a sequence
of iterated substitutions. This operation leads to the reduced
form of the model,

'15)

where the matrix R is given

(16a-b) R=(I- A)! B

and the following relation can be established,

(17)

E(v,lz,)=R 2.

showing that the component elements of R z, are eo ipso predictors
 for the corresponding variables y,,, or briefly stated, that
the reduced form relations make eo ipso predictors for the
current endogenous variables.
7 feature in the generalization from VR-systems (6)

(*) With regard to its theoretical content, a model consists of a set
vf assumptions and a group of theorems deduced from the assumptions. The
term primary form brings in relief that this form contains the basic assumptions;
 the term structural form accentuates that the specification of this
same form determines the theoretical structure of the entire model, including
the reduced form and other relationships deduced from the basic assumptions.

2] Wold - pag. 9