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Blunt Instruments: Avoiding Common Pitfalls in Identifying the Causes of Economic Growth

Year: 2013

Type: article

Abstract: Concern has intensified in recent years that many instrumental variables used in widely-cited growth regressions may be invalid, weak, or both. Attempts to remedy this general problem remain inadequate. We show how a range of published studies can offer more evidence that their results are not spurious. Key steps include: grounding growth regressions in more generalized theoretical models, deployment of new methods for estimating sensitivity to violations of exclusion restrictions, opening the “black box” of GMM with supportive evidence of instrument strength, and utilization of weak-instrument robust tests and estimators. (JEL C52, E23, F35, O41, O47)

Source: American Economic Journal Macroeconomics

DOI: 10.1257/mac.5.2.152

Authors: Samuel Bazzi, Michael A Clemens

Institutions: University of California San Diego, Center for Global Development

Language: English

Topic: Economic Growth and Productivity

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2130911419

FWCI: 119.4

Cites: 138

Cited by: 653

Related to: 10