Question: Consider the three-equation model
where Y1, Y2, and Y3 are endogenous, and X1, X2, and X3 are exogenous. Discuss the identification of each of the equations of the model, based on the order and rank conditions. Now suppose that you want to estimate the first equation by two-stage least squares, but you have only an ordinary least squares program available. Explain carefully, step by step, how you would estimate β13,ϒ12 and var(µ1)·