Econometrics - Instrumental Variables

3 important questions on Econometrics - Instrumental Variables

What is instrumental exogeneity?

Cov(z,u) = 0

Describe a instrumental variable z and how to find it!

  1. Instrumental relevance
  2. Instrumental exogeneity


Can only be found by using theory(identifying assumption)

What is the IV estimator?

application of the method of moment principle

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