Tag: Instrumental Variable

Instrument Diagnostics after Local Projections using locproj with Stata

In three previous posts on the use of Geopolitical Turning Points as instruments for bilateral geopolitical relation, I presented the working paper, the underlying logic of the instrument,…

Illustrating the new IVLPIRF Stata 19’s command

Yesterday, Stata published a spotlight blog on instrumental-variable local projection impulse-response functions built around the ivlpirf command. The point is important. Local projections are already widely used in…

Geopolitical Turning Points and Macroeconomic Volatility: Relevance, Anticipation, and Exclusion (Honey, I think I found an instrument)

An important problem in empirical macroeconomics is that geopolitics can influence economics in the long run. Relations between major powers evolve endogenously with trade, growth, financial conditions, and…