I am trying to estimate a model with three endogenous variables, three equations, three shocks AND TWO ADDITIONAL OBSERVABLE EXOGENOUS VARIABLES… a limited information model, that is to say.
I cannot get it to work. How should I call the two additional exogenous variables: as endogenous or exogenous? Should I write three or five equations (where the last two eqns would be identity eqns)?
Thanks so much for your help,