exogenous variable

Exogenous variable

A variable whose value is determined outside the model in which it is used. Related: Endogenous variable

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Exogenous Variable

In a model, any independent variable whose value is not determined by the model. An exogenous variable is not affected by the model, but still may determine the value of one or more dependent variables. See also: Endogenous variable.

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exogenous variable

a VARIABLE that affects the operation of an ECONOMIC MODEL but which itself is not affected by any of the relationships depicted in the model. For example, in the EQUILIBRIUM LEVEL OF NATIONAL INCOME MODEL, an increase in exports will increase AGGREGATE DEMAND and induce an increase in the level of national income, but the volume of exports itself is determined by any other country's propensity to import and not by the level of its own national income. Compare ENDOGENOUS VARIABLE.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005