Endogeneity and Exogeneity

Endogeneity and exogeneity are properties of variables in economic or econometric models. The specification of these properties for respective variables is an essential component of the entire process of model specification. The words have an ambiguous meaning, for they have been applied in closely related but conceptually distinct ways, particularly in the specification of stochastic models. We consider in turn the case of deterministic and stochastic models, concentrating mainly on the latter.