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PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28

supply relation:

36D) $;=1.825+0.055 p,_; — 0.097 C,_, + 0.123 g, + 4,

price mechanism:

(36c) P,= 0.493 (d,_, ~ 5) +0.229 w, + 0.414 c, + u,”

with all three relations specified as eo ipso predictors, giving

E(d|p, f)=1.580-0.390p,+ 0.520 f,

and similarly for (36b) and (36¢c). Model (36) has the formal
design of a CC-system, inasmuch as s, is influenced only by
oredetermined variables, p, by s, and predetermined variables,
and d, by p, and predetermined variables.
These simple illustrations bring in relief the distinction between
 the notion of instantaneous equilibrium and other modes
of equilibria. In an ID-system that includes (30a), (31a) and
f32) the instantaneous equilibrium enters among the basic assumptions
 of the model. In CC-systems, on the other hand,
instantaneous equilibria have no place; instead, equilibrium
tendencies may enter the picture by way of theoretical deductions
 from the model. Thus in model (36) demand and supply
will under general conditions of stochastic regularity be in
stationary balance, a state of never-ceasing random fluctuations
around a limiting equilibrium level.

4. The general scope of vector regression and causal chain
systems. Brief reference is made to two groups of theorems
that establish the general scope of VR- and CC-systems. The
theorems refer to a set of observed time series (3)-(4) that
are conceived of as extending into the indefinite past
(¢{-1, t-2, ...), and they have the nature of representation
theorems that yield predictive inference under the assumption
that the structure of the interrelations between the time series

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Wold - pag. 18