## Abstract

Economic data are generated by systems of economic relations that are dynamic, stochastic, and simultaneous. In this chapter we consider dynamic aspects of single equation models. Distributed lag models are those that contain independent variables that are observed at different points in time. They are motivated by the fact that effects of changes in an independent variable are not always completely exhausted within one time period but are “distributed ” over several, and perhaps many, future periods. These lagged effects may arise from habit persistence, institutional or technological constraints. They may also be the consequence of how individual decision maker’s expectations are linked with experience. For more extensive justification of dynamic models see Cagan (1956), Nerlove (1956), and Muth (1961)

### Keywords

Covariance Autoco Rrelation Estima Burrows## Preview

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