To recover the underlying parameter formula_56, we introduce a set of variables "Z" that is highly correlated with each endogenous component of "X" but (in our underlying model) is not correlated with "e". For simplicity, one might consider "X" to be a "T" × 2 matrix composed of a column of constants and one endogenous variable, and "Z" to be a "T" × 2 consisting of a column of constants and one instrumental variable. However, this technique generalizes to "X" being a matrix of a constant and, say, 5 endogenous variables, with "Z" being a matrix composed of a constant and 5 instruments. In the discussion that follows, we will assume that "X" is a "T" × "K" matrix and leave this value "K" unspecified. An estimator in which "X" and "Z" are both "T" × "K" matrices is referred to as just-identified .