THE SIMULTANEOUS-EQUATIONS MODEL REVISITED - STATISTICAL ADEQUACY AND IDENTIFICATION

The paper proposes a reinterpretation of the simultaneous-equations model in order to allow for the nature and structure of the observed data to play a role in the empirical analysis of structural models without extenuating the importance of the theory. This suggests a revised view of the identification problem separating it into statistical and structural identification re.lative to a given data. The proposed re-interpretation provides a framework wherein structural modeling and the data-based specifications such as the VAR and the dynamic data-based reduced forms are compliments and not substitutes. © 1990.