Nonrecursive Causal ModelsWhere an assumption of unidirectionality in causal effects is unrealistic, recursive models cannot be used, and more complex nonrecursive models are necessary. Unfortunately, many nonrecursive models (unlike recursive models) are unidentified, which makes meaningful parameter estimation impossible. Even when they are identified, it would be inappropriate to use OLS regression techniques (appropriate for recursive models) for the purpose of estimation.
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