SHAZAM Questions and Answers (Q&A) - RSS feedhttp://community.econometrics.com/questions/SHAZAM Econometrics, Statistics and Analytics Communityen<font color="white">Copyright <b>SHAZAM Analytics, 2018</b></font>Fri, 08 Apr 2011 04:47:09 +0000Restrictions on 2SLS problems and SHAZAMhttp://community.econometrics.com/question/194/restrictions-on-2sls-problems-and-shazam/**A SHAZAM User asked:**
I had some problems running Shazam as follows.
C, I, Y are three endogenous variables.
G and R are two exogenous variables.
There are three equations, two with constants and coefficients, but one is like this:
Y=C+I+G
I wonder if I can still use the 2SLS function and so I wrote the code like this:
2SLS C Y (R G) / DN
2SLS I R (R G) / DN
2SLS Y C I G (R G) / RESTRICT
RESTRICT C=1
RESTRICT I=1
RESTRICT G=1
END
But, it doesn't work. The results are different to my analytical results, which I'm pretty sure are correct.
Can you please help me with this.
Wed, 06 Apr 2011 13:32:31 +0000http://community.econometrics.com/question/194/restrictions-on-2sls-problems-and-shazam/Answer by SHAZAMHelp for <p><strong>A SHAZAM User asked:</strong></p>
<p>I had some problems running Shazam as follows.</p>
<p>C, I, Y are three endogenous variables.
G and R are two exogenous variables.</p>
<p>There are three equations, two with constants and coefficients, but one is like this: </p>
<pre><code>Y=C+I+G
</code></pre>
<p>I wonder if I can still use the 2SLS function and so I wrote the code like this:</p>
<pre><code>2SLS C Y (R G) / DN
2SLS I R (R G) / DN
2SLS Y C I G (R G) / RESTRICT
RESTRICT C=1
RESTRICT I=1
RESTRICT G=1
END
</code></pre>
<p>But, it doesn't work. The results are different to my analytical results, which I'm pretty sure are correct.</p>
<p>Can you please help me with this.</p>
http://community.econometrics.com/question/194/restrictions-on-2sls-problems-and-shazam/?answer=278#post-id-278The problem may be that with 2SLS the identities should not be included in the estimation. So the final equation that states the identity should be removed -- you then have two equations in the system.
If you are trying to estimate a system of equations then you can follow the example commands given in the SHAZAM User's Reference Manual Version 10 (page 331 of the Black cover manual; page 335 of the purple cover manual).
Note that the description states:
All identities have already been substituted.
Fri, 08 Apr 2011 04:47:09 +0000http://community.econometrics.com/question/194/restrictions-on-2sls-problems-and-shazam/?answer=278#post-id-278