Indirect Least Squares is a method for estimating the structural parameters of a single equation in a simultaneous equations model. It involves estimating the parameters of the system in the reduced form using ordinary least squares and solving for the structural parameters in terms of the reduced form parameters.
A comprehensive overview of Reduced Form, a formulation of simultaneous equations models where current endogenous variables are expressed in terms of exogenous and predetermined endogenous variables, including historical context, key events, mathematical formulations, and more.
