Old Wine in a New Bottle: Are Financial Variables Omitted Variables in the Production Function?
13 Pages Posted: 15 Jun 2007
Date Written: April 2007
Abstract
This paper examines the role of financial variables in the production function by making use of nonlinear regressions along with panel data techniques and a G7 data panel set. It offers a non-linear GMM estimator that makes use of instruments that exploit information from the levels of the variables in the production function, while it uses both one-level and two-level bootstraps to check whether the estimates are supported by the data. The results suggest that both money and credit aggregates enter significantly the aggregate production function as an input, indicating that both variables seem to facilitate the process of production.
Keywords: money, credit, production function, GMM estimations, G7 panel
JEL Classification: E23, E51
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
A Simple Panel Unit Root Test in the Presence of Cross Section Dependence
-
A Panic Attack on Unit Roots and Cointegration
By Jushan Bai and Serena Ng
-
Nonstationary Panels, Cointegration in Panels and Dynamic Panels: A Survey
By Badi H. Baltagi and Chihwa Kao
-
Dynamic Panel Estimation and Homogeneity Testing Under Cross Section Dependence
By Peter C. B. Phillips and Donggyu Sul
-
Estimation and Inference in Large Heterogeneous Panels with a Multifactor Error Structure
-
Testing for a Unit Root in Panels with Dynamic Factors
By Hyungsik Roger Moon and Benoit Perron
-
Testing for a Unit Root in Panels with Dynamic Factors
By Hyungsik Roger Moon and Benoit Perron
-
General Diagnostic Tests for Cross Section Dependence in Panels