Computing the Reduced Form

First, the SIMLIN procedure computes reduced form coefficients by premultiplying by :

     

This can be written as

     

where = C and = B are the reduced form coefficient matrices.

The reduced form matrices = C and = 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.