Consider the Time and Entity Fixed Effect Model with a Single

question 39

Essay

Consider the time and entity fixed effect model with a single explanatory variable
Y_it = β₀ + β₁X_it + $\gamma _ { 2 }$ D2_i + ... + $\gamma _ { n }$ Dn_i + δ₂B2_t + ... + δ_TBT_t + u_it,
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_it?

---

Definitions:

Follow-Up Message

A communication sent to re-engage or provide additional information to a recipient after an initial interaction.

Interview

An official gathering where one or more individuals interrogate, seek advice from, or assess another individual.

Legally Binding Contract

An agreement between parties that is enforceable by law, where each party has specific obligations.

Written Acceptance

A formal acknowledgment in writing that agrees to terms or conditions proposed.