Fixing a variable to its initial value
Posted: Fri Feb 17, 2017 7:17 am
Hi there,
I'm doing my master thesis and studying the impact of debt on economic growth.
I'm working on a panel data of 12 european countries during the years 1991 - 2015.
I would like to set the GDP variable to its initial value (value in 1991) in order to test for conditionnal convergence across economies (higher (lower) initial value of GDP tends to lower (higher) economic growth). Do you know how to procede ?
Here is the equation I want to estimate :
y i,t = c + β0 lnGDP i,0 + β1 debt i,t + β2debt2 i,t + β3 gfcf i,t + β4 popgrowth i,t + ui + vt + Ɛi,t
But I can't find a way to fix the lnGDP variable to its initial value.
Could you please help me ?
Thanks a lot in advance
I'm doing my master thesis and studying the impact of debt on economic growth.
I'm working on a panel data of 12 european countries during the years 1991 - 2015.
I would like to set the GDP variable to its initial value (value in 1991) in order to test for conditionnal convergence across economies (higher (lower) initial value of GDP tends to lower (higher) economic growth). Do you know how to procede ?
Here is the equation I want to estimate :
y i,t = c + β0 lnGDP i,0 + β1 debt i,t + β2debt2 i,t + β3 gfcf i,t + β4 popgrowth i,t + ui + vt + Ɛi,t
But I can't find a way to fix the lnGDP variable to its initial value.
Could you please help me ?
Thanks a lot in advance