Pages

Saturday, April 14, 2012

Simultaneous Equations Models

Simultaneous Equations Models (SEM's) played an absolutely central role in the history of Econometrics. Simultaneous systems and measurement errors went hand in glove in forcing the emergence of econometrics as a field in its own right.

It's not that long ago that courses in econometrics devoted a good deal of time to SEM's. These days we spend much less time discussing these models, which is a shame because there are lots of important insights associated with them.