Q3. Consider the following simultaneous equation models. Yl, =@, + 8,13, + 6, X1, +ul (1) Y2: = @2 + BYl, + BY3, + u2: (2) Y'3, = Q; + BY2: + 62X2 + 13, (3) (a) Can you estimate equation (1) with OLS assuming X1 and *2 are exogenous? Explain [2] (b) Use the order condition to identify which of the above equations are just identified. [2] (c) Consider the following set of simultaneous equations: Y=d+ 6XI, +ul (4) 12: = @2 + ,Yl, + 313, + u2, (5) Y3, = Q; + BY2: + 62X2 + u3, (6) Can you estimate equation (4) with OLS assuming X1 and X2 are exogenous? Explain. [2] (d) Write down the reduced form equation for the endogenous variables Y2, and Y3,? [2] (@) Can you estimate equations (5) and (6) with the Indirect Least Square method? Explain. [2]