Hi all,
Does Blundell Bond (BB) work when there is a serial correlation in one or more of the endogeneous variables? Can someone please explain why? BB uses difference in variables to instrument level instruments, but if the variable is persistent, a lot of delta values will be zero or close to zero in many time periods.
Will I have to use any additional stata command for serial correlation issue?
Does Blundell Bond (BB) work when there is a serial correlation in one or more of the endogeneous variables? Can someone please explain why? BB uses difference in variables to instrument level instruments, but if the variable is persistent, a lot of delta values will be zero or close to zero in many time periods.
Will I have to use any additional stata command for serial correlation issue?
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