econometrics

In our weekly seminar, Robert Faff presented a paper with an OLS model with the quadratic and cubic term effects. The dependent variable in this model is the change in cash holdings (\(\Delta CH\)) by a company and the independent variable is the deviation of current cash holding from the optimal level (\(\Delta OPT\)).

Following Sanjay Srivastava’s (fake) syllabus on pychological research, I thought I summarise a couple of recent econometrics related papers with a similar message. Clustered standard errors The first paper by Abadie, Athey, Imbens, and Wooldridge explains why we should think more carefully about the level at which clustering of standard errors is applied (and if it is necessary at all).