Economics · Econometrics - Identification Problem
In a simultaneous equation system, let K be the number of exogenous variables excluded from an equation and g be the number of endogenous variables included in that equation. The order condition for identification states that:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1K < g
- 2K ≥ g - 1✓
- 3K > g
- 4K < g - 1
Correct answer
K ≥ g - 1
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