Emphasize why the need for instrumental variables arises

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Emphasize why the need for instrumental variables arises and how authors have approached the problem. Make sure to include a discussion of over identification, the validity of instruments.

An economy is initially in equilibrium at the natural level. The central bank increases the money supply. Graphically illustrate and explain short-run monetary non-neutrality and long-run monetary neutrality using the AD-AS model.

Reference no: EM13351380

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