st: RE: constant variable as IV in panel?

[Gordon Hughes <G.A.Hughes@ed.ac.uk>]

Since you didn't really get an answer to your final post:

A.  It is hard to believe that a climate variable is the only 
possible instrument for national identity.  Why not take a look at 
some of the World Governance Index (WGI) or other cross-country 
variables published by the World Bank - these vary over time.

B.  Even if this is the only possible instrument, you seem to be 
forgetting that -xtivreg- and other programs such as -ivreg2- 
automatically include all exogenous variables as instruments.  The 
steps that you describe - matching the climate variable with all 
observations for each country and then using xtivreg - should 
work.  I have no idea whether the results will be satisfactory.

Gordon Hughes
g.a.hughes@ed.ac.uk

 

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