tag:blogger.com,1999:blog-2198942534740642384.post3662203090556362409..comments2017-09-22T02:31:03.632-07:00Comments on Econometrics Beat: Dave Giles' Blog: Instrumental Variables & the Frisch-Waugh-Lovell TheoremDave Gileshttp://www.blogger.com/profile/05389606956062019445noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2198942534740642384.post-20846190443493422062017-06-25T17:16:17.534-07:002017-06-25T17:16:17.534-07:00Thanks Andy - 2 typos. Now fixed. DGThanks Andy - 2 typos. Now fixed. DGDave Gileshttps://www.blogger.com/profile/05389606956062019445noreply@blogger.comtag:blogger.com,1999:blog-2198942534740642384.post-90974661871386449502017-06-25T17:13:03.103-07:002017-06-25T17:13:03.103-07:00I could be wrong, but intuitively I think in the f...I could be wrong, but intuitively I think in the first (ii) above it should be regressing e* on E_1*, and therefore it should be e* in the equation for beta* (instead of y*). My intuition comes from the case where X_2 is uncorrelated with y but X_1 is correlated with y. In that case, y* is zero in expectation, but b is nonzero in expectation.andy whttps://www.blogger.com/profile/16722693090673844654noreply@blogger.com