Dear All,
I am a new user of STATA.
Now, I'm doing a research project about Solow growth economic model using panel
data analysis for Asian countries.
Reviewing some literature and definition of the variables, I decided to use
fixed effect model. this is the econometrics model that need to be run:
delta yt = b1 delta yt-1 + b2 delta x1t + b3 delta x2t + b4 delta x3t + time
effect + delta et
note: delta means the difference, so delta yt = yt - yt-1
my question is: if i use xtivreg command and have two instrument vars for delta
yt-1, is this the correct command (assuming i have chosen the correct method)?
xtivreg deltay deltangdelta deltask deltash ( deltay1= y2 deltash1), fe
or do i have to use "original" variable (before taking the differences)?
Thank you for your help
Regards,
Risti
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