Editing Simultaneous equations model (section)

=== Indirect least squares ===
Indirect least squares is an approach in [[econometrics]] where the [[coefficient]]s in a simultaneous equations model are estimated from the [[reduced form]] model using [[ordinary least squares]].<ref>Park, S-B. (1974) "On Indirect Least Squares Estimation of a Simultaneous Equation System", ''The Canadian Journal of Statistics / La Revue Canadienne de Statistique'', 2 (1), 75–82 {{JSTOR|3314964}}</ref><ref>{{cite journal | last1 = Vajda | first1 = S. | last2 = Valko | first2 = P. | last3 = Godfrey | first3 = K.R. | year = 1987 | title = Direct and indirect least squares methods in continuous-time parameter estimation | journal = Automatica | volume = 23 | issue = 6| pages = 707–718 | doi = 10.1016/0005-1098(87)90027-6 }}</ref>  For this, the structural system of equations is transformed into the reduced form first. Once the coefficients are estimated the model is put back into the structural form.