In 1966, Bill Phillips delivered chapter 45 as the Walras-Bowley Lecture at the North American Meeting of the Econometric Society in San Francisco. The paper set out the maximum likelihood estimation of parameters of a system of simultaneous equations when there are lagged endogenous variables and moving average (MA) errors. At that point in time, what work there was on estimating equations with MA errors was largely restricted to a single equation, so that a paper purporting to describe how to produce estimators within a simultaneous equations context was very advanced. One can see how advanced by noting that the first paper to appear in the statistics literature on estimating systems of ARMA equations in the time domain was Wilson (1973), although Hannan (1970) had proposed frequency domain estimators. To this day the paper is probably the clearest analysis of how to construct a full information estimator of the parameters of simultaneous equation models with moving average errors.

A number of interesting questions arise over the origins and fate of the paper. There were, I think, two reasons why Bill was interested in this problem. Both of these reasons are consistent with lectures he delivered at the ANU in 1969. First, there was the fact that rational approximations to dynamic systems, of the sort in Jorgenson (1966), ended up inducing moving average errors into the specifications to be estimated. Griliches' (1967) survey reflects this concern very well.