A pair of equations like this are called simultaneous equations - because you are trying to solve them both with the same values for \(x\) and \(y\).

For more information on these methods, see the references at the end of this chapter. There are two fundamental methods of estimation for simultaneous equations: least squares and maximum likelihood.

Both interest rates and the NEER are shown to influence crude prices inversely. The results imply that crude oil prices should be included in the policy rule equation of an inflation targeting model.