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
Limitations to my model..correlation? endogenity?
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