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I am really thankful for your input! It is much appreciated! But I still do not get it. I do not think it is your fault; it is just my lack of knowledge... Maybe if you can help me with this particular problem I have a better picture and perhaps get the idea better. Suppose, I have the returns of a ...

I cannot test at this moment, but many thanks for your answer already! How does Eviews understand that c Y1 X3 is a function of X2? And what if X1 is also a function of Y1? So we have: Y1 = c + X1 + X2 X2 = c + Y1 + X3 X1 = c + Y1 + X4 How is this possible to enter into the instrument field? X2 x Y1...

Hello all, I cannot figure out how I can make the 2SLS function in Eviews 6 working... I have already gone through the manual, but I get lost when it is talking about instruments... For instance a small example what I want to do: Y1 = c + X1 + X2 + residuals X2 = c + Y1 + X3 + residuals In other wor...