What is the difference between an exogenous variable and an endogenous variable in an economic model? Would it ever be useful to construct a model that contained only exogenous variables (and no endogenous variables)? | Numerade
What is the difference between an exogenous variable and an endog…
Jan 2, 2022
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[GET ANSWER] i. In the model with one endogenous explanatory variable, one exogenous explanatory variable, and one extra exogenous variable, take the reduced form for y2(15.26), and plug it into the structural equation ( 15.22 ). This gives the reduced form for y1 : y1=α0 α1 z1 α2 z2 v1Find the αj in terms of the βj and the πjii. Find the reduced form error, v1, in terms of u1, v2, and the parameters.iii. How would you consistently estimate the aj ?
[GET ANSWER] i. In the model with one endogenous explanatory vari…
Oct 18, 2021
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