st: passthru option in xtabond2

["joserra coco" <pereastroika@hotmail.com>]

Dear Statalist users,

After reading the help file of the xtabond2 command, I see that the passthru 
option in the gmmstyle () section allows to create instruments that use not 
the first-differences of the specified variable but the original levels, to 
be used in the equation in levels.  The reason is that "under the standard 
assumptions" these instruments are not valid. Could anybody ellaborate on 
this point?  Why (or when) is the sole use of levels (disregarding first 
differences) as instruments justified in the context of xtabond2?

Thanks for any information,
J.

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