The model produces the following reduced-form equations: Y 1t = 4 + 8X 1t Y 2t =

Question:

The model

produces the following reduced-form equations:

Y_1t = 4 + 8X_1t

Y_2t = 2 + 12X_1t

a. Which structural coefficients, if any, can be estimated from the reduced-form coefficients? Demonstrate your contention.

b. How does the answer to (a) change if it is known a priori that (1) Î²₁₂ = 0 and (2) Î²₁₀ = 0?

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Basic Econometrics

ISBN: 978-0073375779

5th edition

Authors: Damodar N. Gujrati, Dawn C. Porter

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Question Posted: May 29, 2018 03:56 AM

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The model produces the following reduced-form equations: Y 1t = 4 + 8X 1t Y 2t =

Question:

|Yu = B10 + B12Y21 + Y11X1: +u1t Y21 = B20 + B21 Yu +u2;

Step by Step Answer:

a In this example Y 1 is not identified but Y ...View the full answer

Basic Econometrics

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