An Alternative to Using Simultaneous Equation Models with Panel Data

question 14

Multiple Choice

An alternative to using simultaneous equation models with panel data is:

• A)to use OLS estimates after first differencing the data.
• B)to use fixed effects transformation on the equations and then apply 2SLS.
• C)to convert the equations into reduced form and then apply feasible generalized least squares.
• D)to convert the equations into reduced form and then apply OLS.

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