Techniques for dealing with reverse causality between institutions and economic performance
Cingolani, Luciana and De Crombrugghe, Denis (2012). Techniques for dealing with reverse causality between institutions and economic performance. UNU-MERIT.
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Sub-type Working paper Author Cingolani, Luciana
De Crombrugghe, DenisTitle Techniques for dealing with reverse causality between institutions and economic performance Publication Date 2012 Place of Publication Maastricht Publisher UNU-MERIT Pages 32 Abstract This article provides a succinct review of the arguments stressing the mutual relationship between institutions and economic performance, and a scholarly account of some of the most popular econometric strategies used to minimize reversed causality problems in impact estimation. Among the techniques revisited we find the instrumental variables (IV) approach, distributed lags and vector autoregressions (VAR), quasi-experiments, and identification by heteroskedasticity (IH). Ultimately, the review is conceived as a methodological aide to researchers seeking to explore causal relationships through the use of the Institutional Profiles Database (IPD) produced by the Agence Francaise de Developpement (AFD). Keyword Institutions and growth
Endogeneity
Instrumental variables
Dynamic analysis
Identification through heteroskedasticityJEL O42
C33
C36
P14Copyright Holder UNU-MERIT Copyright Year 2012 Copyright type Creative commons -
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