CORDIS Project
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This project develops new methods for macroeconomic research to address issues of weak identification in causal analysis. By enhancing the use of instrumental variables and providing robust tools for statistical inference, it aims to improve the reliability of empirical findings in macroeconomics.
Following the credibility revolution, macroeconomists have sought plausibly exogenous instruments and other sources of variation to identify causal effects.
Given the complex nature of the macroeconomy, characterised by simultaneous causality and intemporal dependence, this is a high bar.
Thus, in the pursuit of exogenous variation, researchers often use minor sources of variation or subtle features of the data to identify the effects of interest.
When the variation exploited is modest, “weak id…
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