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

in which model we further note the ensuing relation for cur- 
rent price, 
(56) p, = D-'(q,)=D-'(S(p,_,)) 
This famous model that has entered a great many textbooks 
is perhaps the single feature that has contributed most to the 
obscurity in the debate on « simultaneous equation systems. » 
We see that the model paves the way into two main pitfalls 
that hamper the stochastization of multipurpose deterministic 
models, one being the inversion of single relationships, the 
other being the explicit solving for the current endogenous 
variables in nonrecursive multirelation models. It should be 
clear from the above that this comment is not written in a 
critical vein, but rather to emphasize the innovating features 
of CC- and ID-systems. If an appraisal is in place, it is to 
pay homage to JAN TINBERGEN, one of the three initiators of 
the cobweb approach, whose superb intuition led him around 
these pitfalls later on when he constructed the first CC-systems. 
A way out of the dilemma referred to is provided by a 
recent theorem that makes ID-systems bi-expectational by 
means of a respecification of the primary form. We proceed 
to a brief presentation of this new twist of the ID-approach. 
2.3. On bi-expectational interdependent (BEID-) systems (1). 
Given an ID-system (18)-(23), the corresponding BEID- 
system is obtained as follows: The primary form (18) is respe- 
cified by the definition 
y,=A v'+B z, 
(°) For equivalent results in less elaborate form see Ref. 13, Theorem 10 
and Ref. 12, Remark 3.2.2b 
2] Wold - pag. 30

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