SEMAINE D'ETUDE SUR LE ROLE DE L ANALYSE ECONOMETRIQUE ETC.

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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 relations
 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 endogenous
 variables;
2) The matrix (I - A) 1s nonsingular.

21 Wold - pag. 11