DYNAMIC STRUCTURE AND ESTIMATION 
IN ECONOMY-WIDE ECONOMETRIC MODELS 
FRANKLIN M. FISHER (*) 
Massachusetts Institute of Technology - Cambridge, Mass. - U.S.A. 
.. INTRODUCTION 
ND CLASSIVICATION OF ESTIMATORS 
1.1. General Introduction 
This paper is concerned with the techniques of and the 
problems in the structural estimation of economy-wide econo- 
metric models. Briefly stated, the essential general features 
of such models which raise special problems for estimation are 
as follows. They tend to involve a large number of equations 
and variables; they are nearly closed in the sense that most of 
the variables of the model are endogenously determined; they 
are dynamic and essentially interconnected in the sense that, 
considered as dynamic systems, they are indecomposable; fi- 
nally, the disturbances from different equations tend to be cor- 
related with each other and with their own past values. All of 
these features will be discussed at greater length below, and all 
(*) This paper was largely written during my tenure of a National 
Science Foundation Postdoctoral Fellowship at the Econometric Institute 
of the Netherlands School of Economics. I am indebted to T. J. ROTHENBERG 
for helpful conversations and to L. R. Krein and E. Kun for criticism of 
an earlier draft but remain responsible for errors. The paper forms part 
of mv contribution to the Brookings-SSRC econometric model project. 
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Fisher - pag.