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  1. K

    Economics - Instrumental Variable: Does including past values of regressors into the IV cause exogeneity assumption to fail?

    I have to apologize for my impoliteness of answering so slow. The notifications keep ending up in my spam. I am sorry. To put some flesh to the bone, the analysis is based on a panel data set containing of 125 countries and 35 years (so not only one cross-section). There is reason to believe...
  2. K

    Economics - Instrumental Variable: Does including past values of regressors into the IV cause exogeneity assumption to fail?

    Thank you so much for your answer. I use IV because reverse causality is likely (y effects x). The delta is based on x of past and future. So my question is if that means that the exogeneity condition (no correlation of IV and y exept throught x) still holds.
  3. K

    Economics - Instrumental Variable: Does including past values of regressors into the IV cause exogeneity assumption to fail?

    Setup: Annual panel of 125 countries. I am interested in the effect of x on y. As an instrument z I use an interaction of the variables gamma and delta. gamma fulfils the conditions of relevance and exogeneity. delta is the country’s propensity to receive x, which is an indicator variable based...