Is it possible to instrument the level equation with lagged residuals in
first differences using Stata 10 with either xtdpd or xtabond2? This
technique is used in the example of Arellano's "Panel data
econometrics", pgs. 167 and 169 (using predetermined instruments for the
errors in levels).
Thanks in advance,
Fernando
--
Fernando Terres
Lecturer. PhD candidate
CERPIE/Research
Universitat Politecnica de Catalunya
Diagonal, 647 - 10
08028 Barcelona (Spain)
+34.934.010.708
fernando.terres@upc.edu
http://cerpie.upc.edu
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