I have been taught that including fixed/random effects in a dynamic panel model yields inconsistent estimates when using OLS and hence motivates the usage of other estimation methods.

However, does this also apply to the inclusion of a constant term, i.e. an intercept?

  • $\begingroup$ By “dynamic” you are referring to the presence of lagged dependent variable(s)? Correct? $\endgroup$ – Thomas Bilach Nov 17 '20 at 6:29
  • $\begingroup$ Yes, exactly @ThomasBilach. $\endgroup$ – shenflow Nov 17 '20 at 6:54

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Browse other questions tagged or ask your own question.