Consider the following statements about identification in simultaneous equation models:
1) A model is said to be under-identified if there are fewer instruments than endogenous variables.
2) A model is over-identified when more than one instrument is available for an endogenous variable.
3) The rank condition is necessary but not sufficient for the identification of simultaneous equations.
Which of the following options is correct?
1
Only statements 1 and 2 are correct
2
Only statements 2 and 3 are correct
3
Only statements 1 and 3 are correct
4
All statements 1, 2, and 3 are correct
5
Question Not Attempted