Question
Q2: From the model Y1t = 10 + 12Y2t + 11 X1t + u1t Y2t = 20 + 21Y1t + 22 X2t + u2t the
Q2: From the model
Y1t = 10 + 12Y2t + 11 X1t + u1t
Y2t = 20 + 21Y1t + 22 X2t + u2t
the following reduced-form equations are obtained:
Y1t = 10 + 11 X1t + 12 X2t + wt
Y2t = 20 + 21 X1t + 22 X2t + vt
a. Are the structural equations identified?
b. What happens to identification if it is known a priori that 11 = 0?
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International Management Culture, Strategy and Behavior
Authors: Fred Luthans, Jonathan Doh
10th edition
1259705072, 1259705076, 978-1259705076
