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Estimation and Inference in Econometrics
, 1993
"... The astonishing increase in computer performance over the past two decades has made it possible for economists to base many statistical inferences on simulated, or bootstrap, distributions rather than on distributions obtained from asymptotic theory. In this paper, I review some of the basic ideas o ..."
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Cited by 1204 (4 self)
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The astonishing increase in computer performance over the past two decades has made it possible for economists to base many statistical inferences on simulated, or bootstrap, distributions rather than on distributions obtained from asymptotic theory. In this paper, I review some of the basic ideas of bootstrap inference. The paper discusses Monte Carlo tests, several types of bootstrap test, and bootstrap confidence intervals. Although bootstrapping often works well, it does not do so in every case.
Does trade cause growth
- American Economic Review
, 1999
"... you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact inform ..."
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Cited by 1048 (14 self)
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you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at
Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development
- FREE UNIVERSITY OF BERLIN
, 2004
"... We estimate the respective contributions of institutions, geography, and trade in determining income levels around the world, using recently developed instrumental variables for institutions and trade. Our results indicate that the quality of institutions “trumps” everything else. Once institutions ..."
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Cited by 817 (28 self)
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We estimate the respective contributions of institutions, geography, and trade in determining income levels around the world, using recently developed instrumental variables for institutions and trade. Our results indicate that the quality of institutions “trumps” everything else. Once institutions are controlled for, conventional measures of geography have at best weak direct effects on incomes, although they have a strong indirect effect by influencing the quality of institutions. Similarly, once institutions are controlled for, trade is almost always insignificant, and often enters the income equation with the “wrong” (i.e., negative) sign. We relate our results to recent literature, and where differences exist, trace their origins to choices on samples, specification, and instrumentation.
A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments
- Journal of Business & Economic Statistics
, 2002
"... Weak instruments arise when the instruments in linear instrumental variables (IV) regression are weakly correlated with the included endogenous variables. In generalized method of moments (GMM), more generally, weak instruments correspond to weak identification of some or all of the unknown paramete ..."
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Cited by 484 (11 self)
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Weak instruments arise when the instruments in linear instrumental variables (IV) regression are weakly correlated with the included endogenous variables. In generalized method of moments (GMM), more generally, weak instruments correspond to weak identification of some or all of the unknown parameters. Weak identification leads to GMM statistics with nonnormal distributions, even in large samples, so that conventional IV or GMM inferences are misleading. Fortunately, various procedures are now available for detecting and handling weak instruments in the linear IV model and, to a lesser degree, in nonlinear GMM. KEY WORDS:
The causes of corruption: a cross-national study
, 2000
"... Why is corruption — the misuse of public office for private gain — perceived to be more widespread in some countries than others? Different theories associate this with particular historical and cultural traditions, levels of economic development, political institutions, and government policies. Thi ..."
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Cited by 397 (2 self)
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Why is corruption — the misuse of public office for private gain — perceived to be more widespread in some countries than others? Different theories associate this with particular historical and cultural traditions, levels of economic development, political institutions, and government policies. This article analyzes several indexes of ‘perceived corruption’ compiled from business risk surveys for the 1980s and 1990s. Six arguments find support. Countries with Protestant traditions, histories of British rule, more developed economies, and (probably) higher imports were less ‘corrupt’. Federal states were more ‘corrupt’. While the current degree of democracy was not significant, long exposure to democracy predicted
GMM estimation with persistent panel data: an application to production functions
, 1998
"... We consider the estimation of Cobb-Douglas production functions using panel data covering a large sample of companies observed for a small number of time periods. Standard GMM estimators, which eliminate unobserved firm-specific effects by taking first dierences, have been found to produce unsatisf ..."
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Cited by 395 (7 self)
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We consider the estimation of Cobb-Douglas production functions using panel data covering a large sample of companies observed for a small number of time periods. Standard GMM estimators, which eliminate unobserved firm-specific effects by taking first dierences, have been found to produce unsatisfactory results in this context (Mairesse and Hall, 1996). We attribute this to weak instruments: the series on firm sales, capital and employment are highly persistent, so that lagged levels are only weakly correlated with subsequent first dierences. As shown in Blundell and Bond (1998
Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments
- Journal of Economic Perspectives
, 2001
"... The method of instrumental variables is a signature technique in the econometrics toolkit. The canonical example, and earliest applications, of instrumental variables involved attempts to estimate demand and supply curves. 1 Economists such as P.G. Wright, Henry Schultz, Elmer Working and Ragnar Fri ..."
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Cited by 379 (3 self)
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The method of instrumental variables is a signature technique in the econometrics toolkit. The canonical example, and earliest applications, of instrumental variables involved attempts to estimate demand and supply curves. 1 Economists such as P.G. Wright, Henry Schultz, Elmer Working and Ragnar Frisch were interested in estimating the elasticities of demand and supply for products ranging from herring to butter, usually with time series data. If the demand and supply curves shift over time, the observed data on quantities and prices reflect a set of equilibrium points on both curves. Consequently, an ordinary least squares regression of quantities on prices fails to identify—that is, trace out—either the supply or demand relationship. P.G. Wright (1928) confronted this issue in the seminal application of instrumental variables: estimating the elasticities of supply and demand for flaxseed, the source of linseed oil. 2 Wright noted the difficulty of obtaining estimates of the elasticities of supply and demand from the relationship between price and quantity 1
Economic Shocks and Civil Conflict: An Instrumental Variables Approach
- Journal of Political Economy
, 2004
"... Estimating the impact of economic conditions on the likelihood of civil conflict is difficult because of endogeneity and omitted variable bias. We use rainfall variation as an instrumental variable for economic growth in 41 African countries during 1981–99. Growth is strongly negatively related to c ..."
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Cited by 353 (13 self)
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Estimating the impact of economic conditions on the likelihood of civil conflict is difficult because of endogeneity and omitted variable bias. We use rainfall variation as an instrumental variable for economic growth in 41 African countries during 1981–99. Growth is strongly negatively related to civil conflict: a negative growth shock of five percentage points increases the likelihood of conflict by one-half the following year. We attempt to rule out other channels through which rainfall may affect conflict. Surprisingly, the impact of growth shocks on conflict is not significantly different in richer, more democratic, or more ethnically diverse countries. I.
