6-2 1 Motivations All the models we have looked at thus far have been single equations models of the form y=XB+u All of the variables contained in the X matrix are assumed to be EXogenous由系统外因素决定的变量 y is an EndoGenous variable.既影响系统同时又被该系统 及其外部因素所影响的变量 An example -the demand and supply of a good: Q=a+m+S1+l1(1) Ost =a+up+xt+v,(2) Oa Os=quantity of the good demanded/ supplied price, price of a substitute good T,= some variable embodying the state of technology C Chris brooks2002,陈磊204© Chris Brooks 2002, 陈磊 2004 6-2 1 Motivations • All the models we have looked at thus far have been single equations models of the form y = X + u • All of the variables contained in the X matrix are assumed to be EXOGENOUS.由系统外因素决定的变量 • y is an ENDOGENOUS variable. 既影响系统同时又被该系统 及其外部因素所影响的变量. An example - the demand and supply of a good: (1) (2) (3) 、 = quantity of the good demanded / supplied Pt = price， St = price of a substitute good Tt = some variable embodying the state of technology Qdt = + Pt + St + ut  Q P T v st =  +  t + t + t Qdt = Qst Qdt Qst