st: Solow growth model

[Kit Baum <baum@bc.edu>]

Risti writes

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


Sounds to me like a job for xtabond / xtabond2. This is a dynamic  
panel data model, and standard IV techniques are not going to be  
appropriate.


Kit Baum, Boston College Economics
http://ideas.repec.org/e/pba1.html


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