Definitions for

**"Exogenous variable"**A variable caused by one or more variables not contained within the given model.

A variable that is taken as given by an economic model. It therefore is subject to direct manipulation by the modeler. In most models, policy variables such as tariffs and par values of pegged exchange rates are exogenous. Contrasts with endogenous variable.

a variable that never appears as a dependent variable in any equation in a structural model

Expectations hypothesis theories Expectations theory of forward exchange rates