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- Sun May 27, 2018 8:18 am
- Forum: Econometric Discussions
- Topic: 2SLS
- Replies: 0
- Views: 3363
2SLS
Assume I want to regress the labor tax rate on the inherited public net debt-to-GDP ratio (i.e. the public net debt-to-GDP of last year) and total government spending (in % of GDP) of country X. Put another way LAB_t = β_0 + β_1*GOVSPEND_GDP_t + β_2*INHDEBT_GDP_t + ε_t INHDEBT_GDP_t is assumed to be...