Hello everyone,
can i get your thought on this.
im studying the relationship between financial stability, financial development and economic growth.
First phase : the estimation of the 3-way relationship.
Second phase : im adding the interacting term between financial development (proxies by one variable) and economic growth (proxies by 2 variables) to the equation model.
Model and data specifications:
1. the Lag dependent variable is added in the regression
2. endogeneity (the lagdpvar is also considered endogenous) and heteroscedasticity is proven to exist
3. the IV (2sls) approach is used
4. the list of IVs contained a mix of some exogenous variables and lag variables of the endogenous
5. all the results are cluster robust to heteroscedasticity
6. for robustness: an alternative dependent variable and IV-GMM are used.
7. N=21 and T=12
can i get your thought on this.
im studying the relationship between financial stability, financial development and economic growth.
First phase : the estimation of the 3-way relationship.
Second phase : im adding the interacting term between financial development (proxies by one variable) and economic growth (proxies by 2 variables) to the equation model.
Model and data specifications:
1. the Lag dependent variable is added in the regression
2. endogeneity (the lagdpvar is also considered endogenous) and heteroscedasticity is proven to exist
3. the IV (2sls) approach is used
4. the list of IVs contained a mix of some exogenous variables and lag variables of the endogenous
5. all the results are cluster robust to heteroscedasticity
6. for robustness: an alternative dependent variable and IV-GMM are used.
7. N=21 and T=12
