PROC SIMLIN: Computing the Reduced Form

Computing the Reduced Form

First, the SIMLIN procedure computes reduced form coefficients by premultiplying by $\text{[math]}$ :

$\text{[math]}$

This can be written as

$\text{[math]}$

where $\text{[math]}$ $\text{[math]}$ = $\text{[math]}$ C and $\text{[math]}$ $\text{[math]}$ = $\text{[math]}$ B are the reduced form coefficient matrices.

The reduced form matrices $\text{[math]}$ $\text{[math]}$ = $\text{[math]}$ C and $\text{[math]}$ $\text{[math]}$ = $\text{[math]}$ B are printed unless the NORED option is specified in the PROC SIMLIN statement. The structural coefficient matrices G, C, and B are printed when the ESTPRINT option is specified.

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The SIMLIN Procedure