What Is an Endogenous Variable?

In economic models, endogenous variables refer to the variables to be determined by the model. Endogenous variables can be explained in the model system, exogenous variables themselves cannot be explained in the model system.

In economic models, endogenous variables refer to the variables to be determined by the model. Exogenous variables refer to known variables that are determined by factors outside the model. They are external conditions on which the model is built. Endogenous variables can be explained in the model system, exogenous variables themselves cannot be explained in the model system. The parameters are usually determined by factors outside the model, so they are often viewed as exogenous variables. ^[1]

In general, endogenous variables are related to random terms, namely:

In the simultaneous equation model, endogenous variables can be used as both explanatory variables and explanatory variables in different equations.

In promoting social progress, to effectively change endogenous variables, we must start by changing the exogenous variables that determine the endogenous variables. If we do not change the exogenous variables and want to directly change the endogenous variables, then not only will things go wrong, but, May make things worse.

It is a variable determined by the internal factors of the model system. It is a random variable with a certain probability distribution, which is the result of the model solution. ^[2]