Template-type: ReDIF-Paper 1.0
Author-Name: Cingolani, Luciana
Author-Email: cingolani@merit.unu.edu
Author-Workplace-Name: UNU-MERIT / MGSOG, Maastricht University
Author-Name: Crombrugghe, Denis de
Author-Email: d.decrombrugghe@maastrichtuniversity.nl
Author-Workplace-Name: School of Business and Economics, Maastricht University
Title: Techniques for dealing with reverse causality between institutions and economic
	 performance  
Abstract: This article provides a succinct review of the arguments stressing the
	 mutual relationship between institutions and economic performance, and a
	 scholarly account of some of the most popular econometric strategies
	 used to minimize reversed causality problems in impact estimation. Among
	 the techniques revisited we find the instrumental variables (IV)
	 approach, distributed lags and vector autoregressions (VAR),
	 quasi-experiments, and identification by heteroskedasticity (IH).
	 Ultimately, the review is conceived as a methodological aide to
	 researchers seeking to explore causal relationships through the use of
	 the Institutional Profiles Database (IPD) produced by the Agence
	 Francaise de Developpement (AFD).
Classification-JEL: O42, C33, C36, P14
Keywords: Institutions and growth, endogeneity, instrumental variables,
	 dynamic analysis, identification, heteroskedasticity. 
Series: UNU-MERIT Working Papers
Creation-Date: 2012
Number: 034
File-URL: http://www.merit.unu.edu/publications/wppdf/2012/wp2012-034.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2012034