Suchergebnisse

We look at conventional methods for removing endogeneity bias in regression models, including the linear model and the probit model. It is known that the usual Heckman two-step procedure should not be used in the probit model: from a theoretical perspective, it is unsatisfactory, and likelihood methods are superior. However, serious numerical problems occur when standard software packages try to maximize the biprobit likelihood function, even if the number of covariates is small. We draw conclusions for statistical practice. Finally, we prove the conditions under which parameters in the model are identifiable. The conditions for identification are delicate; we believe these results are new.

European-wide monetary aggregates constructed from pre-unification data cannot be used as evidence that money demand in the Euro area is stable. To overcome the Lucas critique, we apply the standard foreign exchange rate model. Since the uncoordinated country-specific money supply system is abolished, the increased comovement between local monetary aggregates leaves little room for a free ride on the law of large numbers. Current monetary policy decisions must be based on untested relations, & given "the long & variable lags." We conclude that the road toward monetary stability is a nonactivist steady money supply policy. 4 Tables, 1 Figure, 36 References. Adapted from the source document.

A discrete or continuous outcome is determined by a structural function in which the effect of some variables of interest is transmitted through a scalar index. Multiple sources of stochastic variation can appear as arguments of the structural function, but not in the index. There may be endogeneity, that is observable and unobservable variables may not be independently distributed. Conditions are provided under which there is local identification of measures of the relative sensitivity of the index to variations in pairs of its possibly endogenous arguments, namely ratios of partial derivatives of the index.

The study of international relations (IR), and political science more broadly, has derived great benefits from the recent growth of conceptualizing and modeling political phenomena within their broader network contexts. More than just a novel approach to evaluating old puzzles, network analysis provides a whole new way of theoretical thinking. Challenging the traditional dyad-driven approach to the study of IR, networks highlight actor interdependence that goes beyond dyads and emphasizes that many traditional IR variables, such as conflict, trade, alliances, or international organization memberships must be treated and studied as networks. Properties of these networks (e.g., polarization, density), and of actor positions within them (e.g., similarity, centrality), will then reveal important insights about international events. Network analysis, however, is not yet fully adapted to account for important methodological issues common to IR research, specifically the issue of endogeneity or possible nonindependence between actors' position within international networks and the outcomes of interest: for example, alliance network may be nonindependent from the conflict or trade network. We adopt an instrumental variable approach to explore and address the issue of endogeneity in network context. We illustrate the issue and the advantages of our approach with Monte Carlo analysis, as well as with several empirical examples from IR literature.