Instrument selection for estimation of a forward-looking Phillips Curve

C-Tier
Journal: Economics Letters
Year: 2016
Volume: 145
Issue: C
Pages: 123-125

Authors (3)

Berriel, Tiago (not in RePEc) Medeiros, Marcelo C. (University of Illinois at Urba...) Sena, Marcelo J. (not in RePEc)

Score contribution per author:

0.335 = (α=2.01 / 3 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We show that data-driven instrument selection based on the LASSO estimator can perform well comparative to the usual ad hoc instrument set for single equation estimation of a forward-looking Phillips Curve, when the overall identification condition is strong or in cases when the instruments are not very weak. We conclude that in face of model uncertainty and/or some potentially weak instruments within a large number of candidates, data-driven selection may provide a disciplined and more reliable estimation strategy.

Technical Details

RePEc Handle
repec:eee:ecolet:v:145:y:2016:i:c:p:123-125
Journal Field
General
Author Count
3
Added to Database
2026-01-26