The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Simultaneous Equations Models

  • Thomas J. Rothenberg
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_1765

Abstract

Models that attempt to explain the workings of the economy typically are written as interdependent systems of equations describing some hypothesized technological and behavioural relationships among economic variables. Supply and demand models, Walrasian general equilibrium models, and Keynesian macromodels are common examples. A large part of econometrics is concerned with specifying, testing and estimating the parameters of such systems. Despite their common use, simultaneous equations models still generate controversy. In practice there is often considerable disagreement over their proper use and interpretation.

Keywords

Distributed lags Econometrics Endogeneity and exogeneity Recursive models Reduced-form equations Simultaneous equations models Structural equations 

JEL Classifications

C3 
This is a preview of subscription content, log in to check access.

Bibliography

  1. Haavelmo, T. 1944. The probability approach in econometrics. Econometrica 12 (Supplement): 1–115.Google Scholar
  2. Lucas, R. 1976. Econometric policy evaluation: A critique. In The Phillips curve and labor markets, Carnegie-Rochester Conference Series on Public Policy No. 1, ed. K. Brunner and A. Meltzer. Amsterdam: North-Holland.Google Scholar
  3. Marschak, J. 1953. Economic measurement for policy and prediction. In Studies in Econometric Method, ed. W. Hood and T. Koopmans. New York: Wiley.Google Scholar
  4. Samuelson, P. 1947. Foundations of economic analysis. Cambridge, MA: Harvard University Press.Google Scholar
  5. Sims, C. 1980. Macroeconomics and reality. Econometrica 48: 1–48.CrossRefGoogle Scholar
  6. Strotz, R. 1960. Interdependence as a specification error. Econometrica 28: 428–442.CrossRefGoogle Scholar
  7. Wold, H. 1954. Causality and econometrics. Econometrica 22: 162–177.CrossRefGoogle Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Thomas J. Rothenberg
    • 1
  1. 1.