Dundee Discussion Papers in Economics 268: The difference, system and ‘double-D’ GMM panel estimators in the presence of structural breaks

Rosen Azad Chowdhury, Bill Russell

    Research output: Working paper/PreprintDiscussion paper

    25 Downloads (Pure)

    Abstract

    The effects of structural breaks in dynamic panels are more complicated than in time series models as the bias can be either negative or positive. This paper focuses on the effects of mean shifts in otherwise stationary processes within an instrumental variable panel stimation framework. We show the sources of the bias and a Monte Carlo analysis calibrated on United States bank lending data demonstrates the size of the bias for a range of auto-regressive parameters. We also propose additional moment conditions that can be used to reduce the biases caused by shifts in the mean of the data.
    Original languageEnglish
    PublisherUniversity of Dundee
    Number of pages25
    Publication statusPublished - 21 Jun 2012

    Publication series

    NameDundee Discussion Papers in Economics
    PublisherUniversity of Dundee
    No.268
    ISSN (Print)1473-236X

    Keywords

    • Dynamic panel estimators
    • mean shifts/structural breaks
    • Monte Carlo Simulation

    Fingerprint

    Dive into the research topics of 'Dundee Discussion Papers in Economics 268: The difference, system and ‘double-D’ GMM panel estimators in the presence of structural breaks'. Together they form a unique fingerprint.

    Cite this