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Which structural coefficients

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Reference no: EM13881329

The model Y1t = β10 + β12 Y2t + γ11 X1t + u1t Y2t = β20 + β21 Y1t + u2t produces the following reduced-form equations:
Y1t = 4 + 8 X1t
Y2t = 2 + 12 X1t

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) β12 = 0 and (2) β10 = 0?

Reference no: EM13881329

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