Country Fixed Effects and Unit Roots: A Comment on Poverty and Civil War: Revisiting the Evidence
AbstractDjankov and Reynal Querol (2010, RESTAT) show that the level of GDP per capita has no significant effects on the risk of civil war once country fixed effects are accounted for. Therefore, they argue that the relationship between income and civil war is spurious. This paper shows that when focus is on the change, rather than on the level, of GDP per capita that the significant negative relationship between GDP per capita and an indicator variable for civil war is recovered in the country fixed effects regression. In contrast to the argument made in Djankov and Reynal Querol, the paper's findings do not support the claim that the relationship between GDP per capita and civil war is spurious due to timeinvariant omitted variables.
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Bibliographic InfoPaper provided by University of Adelaide, School of Economics in its series School of Economics Working Papers with number 2011-17.
Length: 18 pages
Date of creation: Mar 2011
Date of revision:
income; civil war; unbalanced regression;
Find related papers by JEL classification:
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
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- Almer, Christian & Laurent-Lucchetti, Jérémy & oechslin, Manuel, 2011. "Income shocks and social unrest: theory and evidence," MPRA Paper 34426, University Library of Munich, Germany.
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