Econometrica: Apr 1960, Volume 28, Issue 2

A Short Note on the Transmission of Shocks in Simultaneous Models

https://doi.org/0012-9682(196004)28:2<364:ASNOTT>2.0.CO;2-F
p. 364-367

P. Norregaard Rasmussen

Contrary to arguments advanced by others, it is shown in this note that, in general, a stochastic variation for a given relationship need not be accentuated in simultaneous models. Any statement to that effect must be based on a theory about shocks.
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