Simultaneous equations model (SEM)

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Updated: Aug 20, 2021

An econometric model of relationship among two or more endogenous variables and a set of exogenous or predetermined variables, formulated as a system of equations. An example is the system of the demand and supply equations, where price and quantity are determined endogenously in the equilibrium.

Reference: Oxford Press Dictonary of Economics, 5th edt.


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