Country Fixed Effects and Unit Roots: A Comment on Poverty and Civil War: Revisiting the Evidence

Markus Brückner

No 2011-17, School of Economics and Public Policy Working Papers from University of Adelaide, School of Economics and Public Policy

Abstract: Djankov and Reynal Querol (2010, RESTAT) show that the level of GDP per capita has no significant effects on the risk of civil war once country fixed effects are accounted for. Therefore, they argue that the relationship between income and civil war is spurious. This paper shows that when focus is on the change, rather than on the level, of GDP per capita that the significant negative relationship between GDP per capita and an indicator variable for civil war is recovered in the country fixed effects regression. In contrast to the argument made in Djankov and Reynal Querol, the paper's findings do not support the claim that the relationship between GDP per capita and civil war is spurious due to timeinvariant omitted variables.

Keywords: income; civil war; unbalanced regression (search for similar items in EconPapers)
JEL-codes: C23 O10 O40 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2011-03
New Economics Papers: this item is included in nep-dev
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:adl:wpaper:2011-17

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