Limitations to my model..correlation? endogenity?

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ce123trf
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Joined: Sat Nov 02, 2013 1:49 am

Limitations to my model..correlation? endogenity?

Postby ce123trf » Wed Feb 12, 2014 12:41 pm

I am trying to estimate the effect of public investment in infrastructure on GDP using OLS.

I have put it through Eviews and found that public investment does have an effect on GDP.

But I was wondering that because GDP probably includes public expenditure in the statistics, will this have an effect on my results?

I mean, will be results be overstated because essentially public expenditure is taken into account in the dependent variable and used as an explanatory variable.

Thanks in advance

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