Econometrica: Apr 1965, Volume 33, Issue 2

Near-Identifiability and the Variances of the Disturbance Terms

https://doi.org/0012-9682(196504)33:2<409:NATVOT>2.0.CO;2-X
p. 409-419

Franklin M. Fisher

This paper provides a rigorous generalization of the well-known intuitive result that an equation in a two-equation model is in some sense identified if the variance of its disturbance is small relative to that of the other disturbance. The theorem is proved for the many-equation case.

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