Shuowen Chen, Victor Chernozhukov, Iván Fernández-Val
arXiv 12 Jan 2019 · Econometrics · publishedAEA Papers and Proceedings (2019) · 21 citations (OpenAlex)
arXiv:1901.03821 · PDF · DOI · OpenAlex · Extracted main text
The relationship between democracy and economic growth is of long-standing interest. We revisit the panel data analysis of this relationship by Acemoglu, Naidu, Restrepo and Robinson (forthcoming) using state of the art econometric methods. We argue that this and lots of other panel data settings in economics are in fact high-dimensional, resulting in principal estimators -- the fixed effects (FE) and Arellano-Bond (AB) estimators -- to be biased to the degree that invalidates statistical inference. We can however remove these biases by using simple analytical and sample-splitting methods, and thereby restore valid statistical inference. We find that the debiased FE and AB estimators produce substantially higher estimates of the long-run effect of democracy on growth, providing even stronger support for the key hypothesis in Acemoglu, Naidu, Restrepo and Robinson (forthcoming). Given the ubiquitous nature of panel data, we conclude that the use of debiased panel data estimators should substantially improve the quality of empirical inference in economics.
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The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Daron Acemoglu, Suresh Naidu, Pascual Restrepo \ James A. Robinson Democracy Does Cause Growth | 0.874 | 7 | 2 | 100% |
| 2 | Iván Fernández-Val \ Martin Weidner (2018) Fixed Effects Estimation of Large-TPanel Data Models | 0.511 | 2 | 1 | 100% |
| 3 | Jinyong Hahn \ Guido Kuersteiner (2011) Bias reduction for dynamic nonlinear panel models with fixed effects | 0.511 | 2 | 1 | 100% |
| 4 | Manuel Arellano \ Stephen Bond (1991) Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations | 0.405 | 1 | 1 | 100% |
| 5 | Alexander Chudik, M. Hashem Pesaran \ Jui-Chung Yang (2018) Half-panel jackknife fixed-effects estimation of linear panels with weakly exogenous regressors | 0.405 | 1 | 1 | 100% |
| 6 | Geert Dhaene \ Koen Jochmans (2015) Split-panel Jackknife Estimation of Fixed-effect Models | 0.405 | 1 | 1 | 100% |
| 7 | Iván Fernández-Val \ Martin Weidner (2016) Individual and time effects in nonlinear panel models with large N, T | 0.405 | 1 | 1 | 100% |
| 8 | Jinyong Hahn, Jerry Hausman \ Guido Kuersteiner (2005) Bias Corrected Instrumental Variables Estimation for Dynamic Panel Models with Fixed Effects | 0.405 | 1 | 1 | 100% |
| 9 | Jinyong Hahn \ Whitney Newey (2004) Jackknife and Analytical Bias Reduction for Nonlinear Panel Models | 0.405 | 1 | 1 | 100% |
| 10 | Jan F. Kiviet (1995) On bias, inconsistency, and efficiency of various estimators in dynamic panel data models | 0.405 | 1 | 1 | 100% |
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