Question: Q3. Consider the following simultaneous equation models. Yl, = a, + B3Y3, + 6,X1, +ult Y2, = a2+ BY1, + BY3 + u2t (2) Y3,

Q3. Consider the following simultaneous equation models. Yl, = a, + B3Y3, + 6,X1, +ult Y2, = a2+ BY1, + BY3 + u2t (2) Y3, = a3 + B2Y2+ + 62X2, + u3t (3 (a) Can you estimate equation (1) with OLS assuming X1 and X2 are exogenous? Explain [2] (b) Use the order condition to identify which of the above equations are just identified. [2]

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