Blunt Instruments: Avoiding Common Pitfalls in Identifying the Causes of Economic Growth | Zendy

Samuel Bazzi | Zendy; Michael A. Clemens | Zendy

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Blunt Instruments: Avoiding Common Pitfalls in Identifying the Causes of Economic Growth

Author(s) -

Samuel Bazzi,

Michael A. Clemens

Publication year - 2013

Publication title -

american economic journal macroeconomics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 10.443

H-Index - 61

eISSN - 1945-7707

pISSN - 1945-7715

DOI - 10.1257/mac.5.2.152

Subject(s) - spurious relationship , econometrics , estimator , software deployment , instrumental variable , computer science , range (aeronautics) , statistics , economics , mathematics , engineering , aerospace engineering , operating system

Concern has intensified in recent years that many instrumental variables used in widely-cited growth regressions may be invalid, weak, or both. Attempts to remedy this general problem remain inadequate. We show how a range of published studies can offer more evidence that their results are not spurious. Key steps include: grounding growth regressions in more generalized theoretical models, deployment of new methods for estimating sensitivity to violations of exclusion restrictions, opening the "black box" of GMM with supportive evidence of instrument strength, and utilization of weak-instrument robust tests and estimators. (JEL C52, E23, F35, O41, O47)

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