The Reduced Form of a Block Recursive Model

Various estimators of the reduced form of a block recursive model
are investigated and compared to each other. In particular it is
shown that the structural reduced form estimator, which results
from estimating separately each block of the block recursive model
by some efficient method and then solving the system for the
endogenous variables, is more efficient than the OLS estimator of
the reduced form. Other reduced form estimators derived from OLS or
Two Stage LS estimators of a partially reduced form have
intermediate efficiency properties. The paper has been published in
Schneeweiss et al (2001), but without the appendices.