Identification in Dynamic Shock-Error Models

Looking at a very simple example of an error-in-variables model, I was surprised at the effect that standard dynamic features (in the form of auorre­ 11 lation. in the variables) could have on the state of identification of the model. It became apparent that identification of error-in-variables models was less of a problem when some dynamic features were present, and that the cathegory of "pre­ determined variables" was meaningless, since lagged endogenous and truly exogenous variables had ...