1. What is simultaneous biases? Discuss the cause of ednoginity in regression analysis.

2. Explains concisely what is meant by ' the identification problem'' in the context of liner simultaneous equation model.

3. 

4. i) Consider the identifiability of each of the equations in the following model

(use rank and order conditions):

where:

C(consumption), I(investment), T (taxation), Y(income) are endogenous variables; G(government expenditure) is exogenous; U, V and W are random disturbance terms.

ii) What problems arise in the interpretation of the coefficient estimates of equations that are not identified?

(iii) Why do simultaneous equations violate the classical assumption of independence between the error term and the explanatory variables?

(iv)  What happens if OLS is used to estimate the coefficients of a simultaneous system?

(vii) What is Two-Stage Least Squares? What are the properties of Two-Stage Least Squares?

Posted Date: 7/25/2013 3:27:03 AM | Location : United States

Ask an Expert

Related Discussions:- What is meant by the identification problem, Assignment Help, Ask Question on What is meant by the identification problem, Get Answer, Expert's Help, What is meant by the identification problem Discussions

Write discussion on What is meant by the identification problem
Your posts are moderated

Write your message here..

Related Questions

Growth and patterns multipliers theory, (a) Reasons of Urban Growth (b) Cha... (a) Reasons of Urban Growth (b) Characteristics of Urban Growth (c) Economic Life of a Building (d) Zone of Transition (e) Location Theory (f) Patterns of Growth Theory (g) Growth

Micro economic theory., What is the problem of central economic What is the problem of central economic

General equilibrium, equilibrium of production equilibrium of production

Show the environmental taxes, Q. Show the Environmental Taxes? Environm... Q. Show the Environmental Taxes? Environmental Taxes: Taxes which are imposed on particular activities, or particular products, which are considered to be especially damaging t

Nature of expectations in keynes' theory, Nature of Expectations in Keynes'... Nature of Expectations in Keynes' Theory : The above discussion on the nature of expectations in Keynes' theory may be summarised as follows: 1) In forming long-term expec

Disadvantages of division of labour, Disadvantages of division of labour: ... Disadvantages of division of labour: Division of labour may also have disadvantages that may include the following: (i) Lack of Craftsmanship Division of labour does not m

Disadvantages of state trading, Disadvantages of State Trading State tra... Disadvantages of State Trading State trading has several disadvantages. (i) State trading is often afflicted by the corruption and inefficiency usually associated with the pu

Explain why each of the following factors may influence the, Explain why ea... Explain why each of the following factors may influence the own price elasticity of demand for a commodity. (i) Consumer preferences, that is, whether consumers regard the commod

Movements in demand, diagram of extension and contraction in demand? diagram of extension and contraction in demand?

Opportunity cost, discus how opportunity cost influence supplier''s decisio... discus how opportunity cost influence supplier''s decision to supply labour