with random coefficients and exogenous regressors in both equations. We establish a profound non-identification result: the … joint distribution of the random coefficients is not identified, implying that counterfactual outcomes are also not … focus on means of random coefficients (implying that IV is generally biased), or let the instrument enter the first stage in …

across countries and time. Consequently we develop a correlated random coefficients model, to estimate the average aggregate …