Econometrica: Apr, 1960, Volume 28, Issue 2

Recursive vs. Nonrecursive Systems: An Attempt at Synthesis (Part I of a Triptych on Causal Chain Systems)

https://doi.org/0012-9682(196004)28:2<417:RVNSAA>2.0.CO;2-R
p. 417-427

H. O. A. Wold, Robert H. Strotz

This paper, which in part serves as a common introduction to the two papers following in this issue, attempts to define the meaning of the "casual interpretability of a parameter" in a system of simultaneous linear relationships. It attempts, moreover, to expound a basis for interpreting the parameters of a nonrecursive or interdependent system casually. This is done in terms of an underlying causal chain system to which the interdependent system is either an approximation or a description of the equilibrium state.