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Country Fixed Effects and Unit Roots: A Comment on Poverty and Civil War: Revisiting the Evidence

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  • Markus Bruckner

    ()
    (School of Economics, University of Adelaide)

Abstract

Djankov 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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File URL: http://www.economics.adelaide.edu.au/research/papers/doc/wp2011-17.pdf
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Bibliographic Info

Paper provided by University of Adelaide, School of Economics in its series School of Economics Working Papers with number 2011-17.

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Length: 18 pages
Date of creation: Mar 2011
Date of revision:
Handle: RePEc:adl:wpaper:2011-17

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Keywords: income; civil war; unbalanced regression;

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Cited by:
  1. Maystadt, Jean-François & Trinh Tan, Jean-François & Breisinger, Clemens, 2014. "Does food security matter for transition in Arab countries?," Food Policy, Elsevier, Elsevier, vol. 46(C), pages 106-115.
  2. 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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