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.
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.