Hi,
I include the context around what I am trying to do because I have seen a few posts addressed the "initial values not feasible" error and the answers usually suggest that the problem is context-specific.
I am trying to replicate the methodology of Gemmel et al (2015) (https://onlinelibrary.wiley.com/doi/...111/caje.12105 for anyone interested) who estimate growth in an error correction model with PMG estimators. I am using a different dataset but with best attempts to replicate their variables. It is a strongly balanced panel dataset with 32 countries and 50 years.
The empirical model being estimated is:
Based on the paper above, I have written this into a Stata regression command below:
So far, so good.
However, when i add a variable measuring the deficit, measure of productive spending, and/or measures of tax rates, I get an error saying "initial values not feasible".
Can anyone please explain why I am getting this error and any suggestions for how I could resolve this?
Thanks,
Bailey
PS. output from sum command if it helps
I include the context around what I am trying to do because I have seen a few posts addressed the "initial values not feasible" error and the answers usually suggest that the problem is context-specific.
I am trying to replicate the methodology of Gemmel et al (2015) (https://onlinelibrary.wiley.com/doi/...111/caje.12105 for anyone interested) who estimate growth in an error correction model with PMG estimators. I am using a different dataset but with best attempts to replicate their variables. It is a strongly balanced panel dataset with 32 countries and 50 years.
The empirical model being estimated is:
Based on the paper above, I have written this into a Stata regression command below:
Code:
xtpmg d.growth d.l(growth) d.l(0/1)(gfcfgdp employmentgrowth yearsedugrowth), ///
lr(l.growth gfcfgdp employmentgrowth yearsedugrowth l.lngdpph) ///
ec(ec) replace pmg
However, when i add a variable measuring the deficit, measure of productive spending, and/or measures of tax rates, I get an error saying "initial values not feasible".
Code:
. xtpmg d.growth d.l(growth) d.l(0/1)(deficit gfcfgdp employmentgrowth yearsedugrowth), /// > lr(l.growth deficit gfcfgdp employmentgrowth yearsedugrowth l.lngdpph) /// > ec(ec) replace pmg initial values not feasible r(1400);
Thanks,
Bailey
PS. output from sum command if it helps
Code:
. sum
Variable | Obs Mean Std. dev. Min Max
-------------+---------------------------------------------------------
cno | 1,600 16.5 9.235979 1 32
year | 1,600 1994.5 14.43538 1970 2019
country | 0
growth | 1,392 2.271639 3.119044 -14.62905 23.22328
deltagrowth | 1,599 .0011022 3.148539 -22.35979 17.69307
-------------+---------------------------------------------------------
gdpph | 1,419 32577.79 15364.2 2608.058 107736.9
gdpoecd | 1,600 30154.4 7720.835 17465.46 43038.62
tau_k | 879 21.12976 6.996486 6.408842 44.0468
tau_h | 881 28.7238 8.11874 5.325186 44.85106
tau_c | 881 19.835 8.801477 .3893007 56.56422
-------------+---------------------------------------------------------
topstat | 640 41.69144 11.03143 15 62.28
topstatoecd | 640 41.25007 1.339536 39.2942 44.30247
corptax | 608 24.33271 6.900427 8.5 44.433
corptaxoecd | 608 24.71141 2.009324 22.18547 29.47705
newrdis | 1,396 22.0558 6.615994 4.581 36.781
-------------+---------------------------------------------------------
newrdisoecd | 1,568 21.19239 1.270441 17.224 22.802
neworndis | 1,396 10.43698 2.963426 2.907 17.145
neworndiso~d | 1,568 10.23198 .6838593 8.613 11.002
product | 708 22.34247 3.424551 12.49701 31.7449
nonproduct | 708 21.48362 5.292281 10.39179 43.43213
-------------+---------------------------------------------------------
totalexpen~e | 916 42.54416 8.583787 17.90024 65.10608
totalrevenue | 916 40.65665 8.522095 15.5917 59.20778
deficit | 916 -1.88751 4.081683 -32.06463 18.63277
gfcfgdp | 1,422 21.29825 4.25716 10.19161 46.96551
employment~h | 1,244 .9904144 1.913214 -9.470274 8.539262
-------------+---------------------------------------------------------
employment~d | 768 1.046483 .6836097 -1.575073 1.715709
employment | 1,300 14285.08 24366.4 114.3571 157538.1
yearsedu | 1,536 9.50084 2.439703 2.02 14.1
yearsedugr~h | 1,504 .1090293 .2094127 -2.48 2.404
lngdpph | 1,419 10.28101 .4912268 7.866361 11.58745
-------------+---------------------------------------------------------
lngdpphgro~h | 1,387 .0221826 .0305637 -.153861 .2152882
_est_PMG | 1,600 .69 .4626378 0 1
_est_pmg | 1,600 .69 .4626378 0 1
bar | 879 .2112976 .0699649 .0640884 .440468
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