I am trying to run a model establishing causality between crime rate and economic growth. I am referring to 2010 paper by Bond "Capital Accumulation and Growth: A new look at the empirical evidence ".
Long run growth is assumed to depend upon crime rate
The model includes lagged differences of growth rate, level of violent crime rate, first difference of violent crime rate, lagged difference crime rate. IV technique is suggested to estimate the model, however using (log) level of violent crime and lagged difference crime rate creates a problem and I am getting inaccurate results.
Please help on this or suggest for any other estimation that I can proceed with.
Long run growth is assumed to depend upon crime rate
The model includes lagged differences of growth rate, level of violent crime rate, first difference of violent crime rate, lagged difference crime rate. IV technique is suggested to estimate the model, however using (log) level of violent crime and lagged difference crime rate creates a problem and I am getting inaccurate results.
Please help on this or suggest for any other estimation that I can proceed with.
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