On The Interpretation of Instrumental Variables in the Presence of Specification Errors: A Causal Comment
Burkhard Raunig ()
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Burkhard Raunig: Economic Studies Division, Central Bank of Austria, Otto-Wagner-Platz 3, Vienna 1090, Austria
Econometrics, 2017, vol. 5, issue 3, 1-6
Swamy et al. (2015) argue that valid instruments cannot exist when a structural model is misspecified. This note shows that this is not true in general. In simple examples valid instruments can exist and can help to estimate parameters of interest.
Keywords: causal inference; instrumental variable; omitted variable; structural model (search for similar items in EconPapers)
JEL-codes: B23 C C00 C01 C1 C2 C3 C4 C5 C8 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jecnmx:v:5:y:2017:i:3:p:31-:d:105094
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