Discuss the simultaneous equation model

Assignment Help Macroeconomics

Reference no: EM131480370

Question: Consider the following simultaneous equation model:

Y_1t = A₁ + A₂Y_2t + A₃Y_3t + u_1t

Y_2t = B₁ + B₂Y_2t + A₃Y_3t + u_2t

In this model the Ys are the endogenous variables and the Xs are the exogenous variables and the us are stochastic error terms.

(a) Obtain the reduced form regressions.

(b) Which of the above equations is identified?

(d) Suppose it is known a priori that A3 is zero. Will this change your answer to the preceding questions? Why?

Reference no: EM131480370

Questions Cloud

Maintain your np licensure and certification : Post the necessary continuing education that you will need to complete to maintain your NP licensure and certification per your state.

Development of a secure infrastructure : Write a paper regarding development of a secure infrastructure for the project organization. Be sure to cover the following topics:

Common encryption algorithms and methods : Select any three (3) encryption algorithms and develop a well-researched, well-developed paper that would provide a non-technical reader

Definitions of the quality of medical care : What is the primary method of continuous quality improvement (CQI) in health care, and what is its underlying premise?

Discuss the simultaneous equation model : In this model the Ys are the endogenous variables and the Xs are the exogenous variables and the us are stochastic error terms.

Analyze the impact of insufficient funding on stakeholders : In your analysis, explain the policy issue, assess the funding situation, and analyze the impact of insufficient funding on stakeholders.

Summary report explaining what kind of malicious attack : Write a summary report explaining what kind of malicious attack it was, how it spread and attacked other devices, and how it was mitigated.

How critical you think the situation is at good hands health : Which do you think is their best option or can you suggest another idea that you would recommendation to the board of directors?

How the project aligns to the organizations strategic goals : Explain how the project aligns to the organization's strategic goals. Develop a project charter that includes a high-level scope of what is to be accomplished.

User Account

All Pages