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