### Solving consistently with known endogenous variables

Posted:

**Fri Mar 10, 2017 3:39 am**In forecasting, a practical question often arises:

Letâ€™s presume t is the first period for which the model is solved i.e. all endogenous variables are unknown.

Then, if we have information on endogenous for t or t+x, we can incorporate them in the solution with the model.exclude(actexist=t) statement.

If however we have the following situation:

x = y + z

and if we observe x (which is an identity) but not y and/or z (which are endogenous behavioral), how can we guarantee the holding of the identity? This is a very practical question since in Macroeconomics, we often observe the aggregates before we observe the detailed components.

Many thanks

Ferdy

Letâ€™s presume t is the first period for which the model is solved i.e. all endogenous variables are unknown.

Then, if we have information on endogenous for t or t+x, we can incorporate them in the solution with the model.exclude(actexist=t) statement.

If however we have the following situation:

x = y + z

and if we observe x (which is an identity) but not y and/or z (which are endogenous behavioral), how can we guarantee the holding of the identity? This is a very practical question since in Macroeconomics, we often observe the aggregates before we observe the detailed components.

Many thanks

Ferdy