I would like to simulate some data and I'd like to know if I can do this with Stata.
For instance, suppose I have the following equations:
y = 5x + u
x = 2z + e
and I randomly generate u and y and solve for x in the first equation. Then I'd like to create e such that the correlation between u and e is 0.5, and generate z such that u and z are uncorrelated. Can I do this in Stata?
Thank you!!
Adrian
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