Question
Question 1 Suppose in a system of equation below, Y1 and Y2 are endogenous variables. Show mathematically that the Y2 equation is exactly identified and
Question 1
Suppose in a system of equation below, Y1 and Y2 are endogenous variables. Show mathematically that the Y2 equation is exactly identified and the Y1 equation is not identified.
Y1=a+bY2+cX1+u1
Y2=d+eY1+u2
Hint: Express these structural equations in reduced form equations. Then use the reduced form parameter estimates to solve for the structural parameters. This is an example of indirect least squares (ILS).
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Essentials Of Business Law And The Legal Environment
Authors: Richard A Mann, Barry S Roberts
10th Edition
0324593562, 9780324593563
