
\subsection{Dynamic or lagged independent variables}

Static panel data: No lags of independent variables.
Dynamic panel data: Lags of independent variables.

OLS is consistent for static panel data, not for dynamic
This results in Nickell's bias for dynamic panel data

Dynamic panel data: \(y_{t-1}\) is a regressor
Panel data estimation: LSDV. Least squares dummy variable estimator
arnello bond

