Consider the Time and Entity Fixed Effect Model with a Single

question 13

Essay

Consider the time and entity fixed effect model with a single explanatory variable $$Y _ { i t } = \beta _ { 0 } + \beta _ { 1 } X _ { i t } + \gamma _ { 2 } D 2 _ { i } + \ldots + \gamma _ { n } D n _ { i } + \delta _ { 2 } B 2 _ { t } + \ldots + \delta _ { T } B T _ { t } + u _ { i t } ,$$ Assume that you had estimated the above equation by OLS. Typically the coefficients for the entity and time binary variables are not reported. Can you think of situations where the pattern of these coefficients might be of interest? What could you do, for example, if you had a strong theoretical justification for believing that a few macroeconomic variables had an effect on $Y _ { i t }$ ?

---

Definitions:

Self-Fulfilling Prophecies

Expectations about a situation or individual that lead to behaviors which cause those expectations to come true.

Enrichment

The process of improving the quality or value of something, often related to job roles by adding more meaningful tasks and duties.

Incumbents

Individuals currently holding a specified position or office, especially political positions, who often have a competitive advantage in elections due to their existing role.

Different Skills

Various abilities and competencies that individuals may possess or require across diverse tasks or occupations.