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1.4.5. The Exogenous versus Endogenous Variations.


D.1. The Exogenous versus Endogenous Variations: Every change that can be deduced logically from Given Data is considered as Endogenous, and every change that depends on something external, arbitrary etc, is Exogenous.


E.1. If equilibrium price falls and quantity increases because demand increases because now the supply schedule has shifted to supply the same at lower price, because there is a positive raw material supply shock, all of these are Endogenous changes resulting from an exogenous shift in supply schedule of inputs. However, if there is a demand shock of exported material which affects the trade, or anything, which triggers a policy change by policy makers subject to their own discretion, and their own agendas, which then changes the supply of those goods in the exporting country, such an addition of foreign element of policy makers agenda is something Exogenous unless it follows definitely in a logical deduction from the fundamentals and givens.


Reference: Chapter 04 of Robbins, L. (2007). An essay on the nature and significance of economic science.