Question: I will attach my question. 5 Problem 5 [2D points} Consider the structural equation yr = x1i+x2i +Ei EKIZE} = EKIIE} 5'5 G where x1

I will attach my question.

I will attach my question. 5 Problem 5 [2D points} Consider the

5 Problem 5 [2D points} Consider the structural equation yr = x1i+x2i +Ei EKIZE} = EKIIE} 5'5 G where x1 is a h x 1 vector and x2 is a 3:2 x 1 vector. Let 7., at x 1 vector {k 2 h}, be an instrument for .11, ie,r E (2.3:?) has rank 3:1 and E (26} = . Here 7.. does not necessarily contain x2. You decide to estimate ,3 = {131, '32] using the following twosteps procedure: II In the rst step, you regress an on 2. and obain the predicted values 1. II In the second step, you regress 3; on x2 and 1 to obtain 3 {Y = 1.31 + X232 + ) Find the limit in probability of 3-15 it consitent for ,3? [f not, provide a condition that yields consistency

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