130 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28

viable, in this case the interest rate, say g. In symbols, let the
two behavioural relations be

30a-b)  S,=L(q,, z)+ v, With E(S,lg, z,)= L(g, 2,)

(3ra-b) I, = L,(q,, Z;) +U ; » E (Llg, 2) — L,(q, Z;)

where for simplicity we have assumed that g, is the only current
 endogenous variable that influences S, and I,. Further let
M, denote the common total of savings and investment,

(32)

M,=S,=1,

Then under general conditions of regularity we may substitute
 (30a) and (31a) into (32) and solve for the equilibrating
variable, say

33)

g,=L,(z,)+ v,

Thus we may regard (32) as an impliéit and (33) as an explicit
behavioural relation for the equilibrium variable g,. Now with
regard to the rationale of the generalization from CC- to IDsystems
 the following points will be noted.
The assumptions (30)-(31) make two behavioural relations
for the endogenous variable M,, and no explicit behavioural
relation for the endogenous variable g, and this situation is
incompatible with the general design (10) of CC-systems. This
is so even if the eo ipso predictor specifications (30b) and (31b)
are abandoned. In this connection it is important to note that
if specifications (30b) and (31b) are adopted, relations (30)-(31)
imply

‘34,

E(q,|2,)Æ L3(2,)

showing that relation (33) cannot be specified so as to make
an eo ipso predictor.

2]

Wold - pag. 16