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In the Case of Perfect Multicollinearity, OLS Is Unable to Estimate

Question 25

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In the case of perfect multicollinearity, OLS is unable to estimate the slope coefficients of the variables involved. Assume that you have included both X1 and X2X _ { 1 } \text { and } X _ { 2 } as explanatory variables, and that X2=X12X _ { 2 } = X _ { 1 } ^ { 2 } , so that there is an exact relationship between two explanatory variables. Does this pose a problem for estimation?

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There is no problem for estimation, sinc...

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