Economics · Econometrics
In simultaneous equation models, Ordinary Least Squares (OLS) can be applied directly without bias if:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The coefficient matrix of endogenous variables is singular
- 2There are more endogenous than exogenous variables
- 3The model is recursive (triangular structure with uncorrelated disturbances)✓
- 4All equations are over-identified
Correct answer
The model is recursive (triangular structure with uncorrelated disturbances)
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