Consider the following demand and supply model for money.
Consider the following demand and supply model for money. Demand for Money: Mt to the power d=alpha0+alpha1yt+alpha2Rt+alpha3Pt+u1t
Supply of Money: Mt to the power s=beta 0+ beta1yt+u2t where M = Money, Y = Income, P = Price, and R = rate of interest Assume that R and P are pre-determined. a) Check the identification status of demand and supply equations above. b) What method would you use to estimate the supply equation?