On the interpretation and identification of simultaneous-equation models

In this paper attention is paid to the interpretation of simultaneous-equation models. By choosing a specific variance-covariance structure of the disturbances each equation can be given a conditional expectation interpretation. In this case there is no identification problem. The relation to the REID-systems (introduced by Wold) and to the Cowles Commission interpretation is pointed out. The ideas are illustrated by means of three simple models