These equations tend to be less important with respect to their effects on the main variables in the model. Some of these equations are simply approximations to definitions that would hold if sufficient data were available.
Since the theoretical model was used to guide the specification of the econometric model, it is likely that the two models have similar qualitative policy effects.

SUMMARY
The objective of this paper was achieved in presenting an abstract of the most exciting parts of the specification done by Prof. Fair. Preparation of data was shown and chosen parts of the system of stochastic equations were described. Only the interesting, technically unusual or by other means attracting parts were discussed in detail.
The summaries provide implications for both economic policy and theory. The parts that present results are of high interest for reader, as they provide a view of what the data support and not support. Finally, reading Prof. Fair’s books gives one an edge in every classroom or cafeteria discussion on the economic policy.
An appendix is provided for quick reference of equations discussed.

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Copyright (C) 2003, Ivan Rybar Jr. All rights reserved. Academic use wellcome. German law applies.

Ivan Rybar Jr.
Faculty of Economic Sciences
Martin-Luther-University Halle-Wittenberg.