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Eduncle Asked an Mcq
February 29, 2020 6:42 pm

(a)    The parameters can be validly estimated using separate applications of OLS to each equation
(b)    The independent variables may be correlated with the error terms in other equation
(c)    An application of two-stage least squares would lead to unbiased but inefficient parameter estimation                
(d)    The independent variables may be correlated with the error terms in the equation in which they appear as independent variables
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  • Eduncle Best Answer

    Features of triangular or recursive system :
    (i)    The Parameters can be validly estimated using separate applications of OLS to each equation.
    (ii...

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