Hi everyone,
I need to estimate a system of equations using iterative non-linear least
squares (to test for market rationality (Mishkin(1983)), but I can't find if
stata is able to do such a thing... The system of equations is the
following:
Y1=B1+B2*X1+e1
Y2=B3*(Y1-B1-B4*X1)+e2
Does anyone have an idea of how to do this in stata?
Best,
Nuno
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