6-9 3 Avoiding Simultaneous Equations Bias So What can we do Taking equations( 8 )and(9), we can rewrite them as x25+6(10 Q=20+x21T+z25+b2(l We can estimate equations(10)&(Il) using Ols since all the rhs variables are exogenous But . we probably dont care what the values of the T coefficients are: what we wanted were the original parameters in the structural equations-a, B,r, n, u,K C Chris brooks2002,陈磊204© Chris Brooks 2002, 陈磊 2004 6-9 So What Can We Do? • Taking equations (8) and (9), we can rewrite them as (10) (11) • We CAN estimate equations (10) & (11) using OLS since all the RHS variables are exogenous. • But ... we probably don’t care what the values of the  coefficients are; what we wanted were the original parameters in the structural equations - , , , , , . 3 Avoiding Simultaneous Equations Bias P =  +  T +  S +  10 11 12 1 Q =  +  T +  S +  20 21 22 2