Resurgence of the Endogeneity-Backed Instrumental Variable Methods

Main author: Qin, Duo
Format: Journal Article           
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id eprints-19588
recordtype eprints
institution SOAS, University of London
collection SOAS Research Online
language English
language_search English
description This paper investigates the nature of the IV method for tackling endogeneity. By tracing the rise and fall of the method in macroeconometrics and its subsequent revival in microeconometrics, it pins the method down to an implicit model respecification device—breaking the circular causality of simultaneous relations by redefining it as an asymmetric one conditioning on a non-optimal conditional expectation of the assumed endogenous explanatory variable, thus rejecting that variable as a valid conditional variable. The revealed nature explains why the IV route is popular for models where endogeneity is superfluous whereas measurement errors are of the key concern.
format Journal Article
author Qin, Duo
author_facet Qin, Duo
authorStr Qin, Duo
author_letter Qin, Duo
title Resurgence of the Endogeneity-Backed Instrumental Variable Methods
publisher De Gruyter
publishDate 2015
url https://eprints.soas.ac.uk/19588/