problem 1:
Make a distinction between endogenous and exogenous variables in simultaneous equation model?
problem 2:
prepare down two equations that can be solved simultaneously, determine whether they’re identified or over-identified and get the decreased form equations.
problem 3:
Can OLS be applied to the decreased form equations? Justify your answer.
problem 4:
Make a distinction between a simultaneous model and a recursive model and show clearly that OLS can be applied to recursive model.
problem 5:
What do you understand by these processes?
• Autoregressive
• Distributed lag
• Moving Average
problem 6:
prepare down AR (2) process and MA (1) process.
problem 7:
Compute the (unconditional) means and variances of the dependent variables for both an AR (1) and for MA (1).
problem 8:
Make a distinction and differentiate between a fixed effect models (FEM) and an error components model (ECM)?