(c) Consider the following set of simultaneous equations: Yl =a + 6,X1, +ult (4) Y2 = a2 + 8,Yl, + BY3, + u2, (5) Y3, = a3 + BY2, +

(c) Consider the following set of simultaneous equations:
Yl =a + 6,X1, +ult
(4)
Y2 = a2 + 8,Yl, + BY3, + u2,
(5)
Y3, = a3 + BY2, + 62*2, + 13,
(6
Can you estimate equation (4) with OLS assuming X1 and X2 are exogenous? Explain. [2]
(d) Write down the reduced form equation for the endogenous variables Y2, and Y3,? [2]
(e) Can you estimate equations (5) and (6) with the Indirect Least Square method? Explain. [2]

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