Question: Consider the instrumental variable regression model Y, Bo+BX, + BW +u,, where Z, is an instrument. Suppose that data on W, are not available and

Consider the instrumental variable regression model Y, Bo+BX, + BW +u,, where Z, is an instrument. Suppose that data on W, are not available and the model is estimated omitting W, from the regression.

a. Suppose Z, and W, are uncorrelated. Is the IV estimator consistent?

b. Suppose Z, and W, are correlated. Is the IV estimator consistent?

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