Your Textbook Has Analyzed Simultaneous Equation Systems in the Case $\gamma _ { 0 }$

question 19

Essay

Your textbook has analyzed simultaneous equation systems in the case of two equations,
Y_i = β₀ + β₁X_i + u_i
X_i = $\gamma _ { 0 }$ + $\gamma _ { 1 }$ Y_i + v_i,
where the first equation might be the labor demand equation (with capital stock and technology being held constant), and the second the labor supply equation (X being the real wage, and the labor market clears). What if you had a a production function as the third equation
Z_i = $\delta _ { 0 }$ + $\delta _ { 1 }$ Y_i + w_i
where Z is output. If the error terms, u, v, and w, were pairwise uncorrelated, explain why there would be no simultaneous causality bias when estimating the production function using OLS.

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Definitions:

Sandra Bem

A psychologist known for her work on gender roles and for developing the gender schema theory.

Bisexual

Pertaining to a sexual orientation in which an individual is attracted to both male and female genders.

Gender Schema Theory

A theory that suggests people learn about gender roles and develop gender-based beliefs through cultural and societal norms.

Mental Pattern

A cognitive framework or structure that helps in organizing and interpreting information.