FILE PROC liml.prc
* LIML estimation for the Consumption equation of Klein's Model I.     
* The results from the LIML estimation can be compared to the 2SLS results.
SAMPLE 1 21
* WG     GOVERNMENT WAGE BILL
* T      INDIRECT TAXES
* G      GOVERNMENT EXPENDITURES
* TIME1  TIME TREND  
* PLAG   PROFITS LAGGED ONE PERIOD
* KLAG   STOCK OF CAPITAL AT END OF PREVIOUS PERIOD
* XLAG   PRIVATE PRODUCT LAGGED ONE PERIOD
* C      CONSUMPTION
* I      INVESTMENT
* WP     PRIVATE WAGE BILL
* P      PROFITS
* WGWP   WAGES
* PP     PRIVATE PRODUCT
READ (klein.txt) WG T G TIME1 PLAG KLAG XLAG C I WP P WGWP PP 
GENR ONE=1
* Define all exogenous variables in system
EXOG:ONE PLAG KLAG XLAG TIME1 WG T G 
* Define all endogenous variables in equation
ENDOG:C P WGWP 
* Define right-hand-side exogenous variables
RHSEXOG:ONE PLAG
* Define all right-hand-side endogenous variables
RHSENDOG:P WGWP
* Define the Left-hand-side endogenous variable
LHS:C
* First equation of Klein Model is C= f( ONE, PLAG, P, WGWP)
* Now run the PROC
EXEC LIML
STOP