Exogenous variable in the context of Errors and residuals

An economic model is a theoretical construct representing economic processes by a set of variables and a set of logical and/or quantitative relationships between them. The economic model is a simplified, often mathematical, framework designed to illustrate complex processes. Frequently, economic models posit structural parameters. A model may have various exogenous variables, and those variables may change to create various responses by economic variables. Methodological uses of models include investigation, theorizing, and fitting theories to the world.

In macroeconomics, a multiplier is a factor of proportionality that measures how much an endogenous variable changes in response to a change in some exogenous variable.

For example, suppose variable x changes by k units, which causes another variable y to change by M × k units. Then the multiplier is M.

In economics, comparative statics is the comparison of two different economic outcomes, before and after a change in some underlying exogenous parameter.

As a type of static analysis it compares two different equilibrium states, after the process of adjustment (if any). It does not study the motion towards equilibrium, nor the process of the change itself.