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Generalized Method of Moments, Efficient Bootstrapping, and Improved Inference

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Author Info
Brown, Bryan W
Newey, Whitney K
Abstract

Generalized method of moments (GMM) has been an important innovation in econometrics. Its usefulness has motivated a search for good inference procedures based on GMM. This article presents a novel method of bootstrapping for GMM based on resampling from the empirical likelihood distribution that imposes the moment restrictions. We show that this approach yields a large-sample improvement and is efficient, and give examples. We also discuss the development of GMM and other recent work on improved inference.

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Publisher Info
Article provided by American Statistical Association in its journal Journal of Business and Economic Statistics.

Volume (Year): 20 (2002)
Issue (Month): 4 (October)
Pages: 507-17
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Handle: RePEc:bes:jnlbes:v:20:y:2002:i:4:p:507-17

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  1. Paulo Parente & Richard Smith, 2008. "GEL methods for non-smooth moment indicators," CeMMAP working papers CWP19/08, Centre for Microdata Methods and Practice, Institute for Fiscal Studies. [Downloadable!]
  2. Giuseppe Ragusa, 2007. "Bayesian Likelihoods for Moment Condition Models," Working Papers 060714, University of California-Irvine, Department of Economics. [Downloadable!]
  3. Russell Davidson & Jean-Yves Duclos, 2006. "Testing for Restricted Stochastic Dominance," Cahiers de recherche 0609, CIRPEE. [Downloadable!]
    Other versions:
  4. Richard Smith, 2005. "Local GEL methods for conditional moment restrictions," CeMMAP working papers CWP15/05, Centre for Microdata Methods and Practice, Institute for Fiscal Studies. [Downloadable!]
  5. Richard Smith, 2004. "GEL Criteria for Moment Condition Models," CeMMAP working papers CWP19/04, Centre for Microdata Methods and Practice, Institute for Fiscal Studies. [Downloadable!]
  6. Giuseppe Ragusa, 2008. "Minimum Divergence, Generalized Empirical Likelihoods, and Higher Order Expansions," Working Papers 080906, University of California-Irvine, Department of Economics. [Downloadable!]
  7. Richard Smith, 2005. "Efficient information theoretic inference for conditional moment restrictions," CeMMAP working papers CWP14/05, Centre for Microdata Methods and Practice, Institute for Fiscal Studies. [Downloadable!]
    Other versions:
  8. Jason Allen & Allan W. Gregory & Katsumi Shimotsu, 2008. "Empirical Likelihood Block Bootstrapping," Working Papers 1156, Queen's University, Department of Economics. [Downloadable!]
    Other versions:
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