Two Stage Least Squares Estimation of Linear Models 19.4. Chapters 14-16 give full details on these options. The list of instruments may include any variables existing in the data set. Indeed, it will often be the case that Inst should include ONE even if the Rhs does not.
Computations use the standard results for two stage least squares.
There are no degrees of freedom corrections for variance estimators when this estimator is used. It will show up as a difference in all estimated standard errors. DFC to your 2SLS command. For estimating a simultaneous equations model with first order autoregressive disturbances, the list of instruments should include the lagged values of all endogenous and exogenous variables in the reduced form. Step 1 .