Limitations to my model..correlation? endogenity?
Posted: 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
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