st: non full ranked covariance matrix of moment conditions after xtivreg2

["Anat (Manes) Tchetchik" <anatmanes@gmail.com>]

Dear all,

I have an unbalanced panel of data on 35 countries over 17 years (446 obs.)
I have  jointly significant time effects are, as well as first order
autocorrelation.
As I want to account for two-way (unit and time ) cluster-robust
covariance matrix and estimated the following model:

 xi: xtivreg2 SS dem gini inflation shad_econ_min3  gdp  i.year, fe
cluster( country year) bw(1)

The output below raises two issues:
(1) Why does it indicate that  the  "Number of clusters (year) = 2007"
and not 17 as it should?
(2) how should I treat the Warning: "estimated covariance matrix of
moment conditions not of full rank.  model tests should be interpreted
with caution"
Note that when omitting the year dummies this warning doesn't appear

Number of clusters (country) =     35            Number of obs =      440
Number of clusters (year) =       2007

     ss        Coef.           Std.          Err.
---------------+-------------------------------------------------
dem 0.00493 0.001544 3.19
gini -0.005013 0.00248 -2.02
inflation -5.72E-05 2.18E-05 -2.62



gdp -0.008507 0.009861 -0.86
_Iyear_1991 0.138 0.038671 3.56
_Iyear_1992 0.365 0.079991 4.56
_Iyear_1993 0.332 0.081221 4.09
_Iyear_1994 0.339 0.081055 4.18
_Iyear_1995 0.338 0.084453 4.01
_Iyear_1996 0.360 0.088365 4.07
_Iyear_1997 0.371 0.093862 3.96
_Iyear_1998 0.363 0.100767 3.6
_Iyear_1999 0.400 0.106786 3.75
_Iyear_2000 0.422 0.10945 3.86
_Iyear_2001 0.418 0.115567 3.62
_Iyear_2002 0.416 0.12068 3.45
_Iyear_2003 0.415 0.124553 3.33
_Iyear_2004 0.418 0.128937 3.24
_Iyear_2005 0.418 0.129226 3.23
_Iyear_2006 0.475 0.133707 3.55
_Iyear_2007 0.519 0.14433 3.59


Warning: estimated covariance matrix of moment conditions not of full rank.
         model tests should be interpreted with caution.
Possible causes:
         number of clusters insufficient to calculate robust covariance matrix
         covariance matrix of moment conditions not positive definite
         covariance matrix uses too many lags
         singleton dummy variable (dummy with one 1 and N-1 0s or vice versa)
partial option may address problem.

Best,

Anat Tchetchik, PhD
Department of Business Administration
Guilford Glazer Faculty of Business and Management
Ben-Gurion University of the Negev
P.O.Box: 653
Beer-Sheva, Israel, 84105

E-mail:       anat@som.bgu.ac.il
Phone         972-(0)8-6479735
Fax:           972-(0)8-6472920
*
*   For searches and help try:
*   http://www.stata.com/help.cgi?search
*   http://www.stata.com/support/faqs/resources/statalist-faq/
*   http://www.ats.ucla.edu/stat/stata/