If i use time dummies in a OLS pooled regression, does it imply time fixed effects?

Maybe to clear things up: 1)There is a pooled time -series-cross-section regression, the equation uses time dummies. The estimation Method is described as: OLS with time fixed effects.

2)Now I have another Paper: They used Panel Data and both bilateral fixed effects and year dummies to adjust for unobserved time invariant heterogeneity. --> Are year dummies = time effects, and are they fixed?

3)Same Paper as in 2) uses now Panel Data with bilateral fixed effects and Country-and-Time effects [it, jt]. Are Country-and-time effects also fixed or are non fixed effects possible?

Would be nice if some one can answer my questions, it is really important for me. Thx


1 Answer 1


Ok, found this in internet:

"Time dummy is a variable which equals 1 for a given year and 0 for all other years. It allows to control for time-specific fixed effects i.e. shocks which impact is restricted to a given time-period, affects or panel units and are not controlled by other explanatory variables. " source: https://www.researchgate.net/post/Is_anyone_familiar_with_Time_Trends_vs_Time_Dummies

And: " Year effects (more simply known as “year dummies”" Source: https://www.dartmouth.edu/~ethang/Lectures/Class17/Always%20Control%20for%20Year%20Effects%20in%20Panel%20Regressions.pdf

So i think the use of Time dummies, are Time effects! But if time effects are always fixed I dont know.


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