Consider the model = yay + 8x + 1 By + x + y = where x is exogenous, and the error terms u, and u have mean zero and are serially uncorrelated.

(a) Write down the equations expressing the reduced-form coefficients in terms of the structural parameters.

(b) Show that if y0, then can be identified. Are the parameters a and 8 identified in this case? Why or why not?

(c) In the case of y = 0, what formula would you use to estimate ? What is the asymptotic variance of your estimator of ?