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Interactive Fixed Effects/Evidence
Method evidence record

Interactive Fixed Effects

Interactive Fixed Effects (IFE) extends standard fixed-effects panel models by allowing unit-specific intercepts to vary not just at the individual level but also with unobserved common time-varying factors. Introduced by Bai (2009), it models heterogeneity as the interaction of individual characteristics and common shocks, ideal for studying cross-sectional variation in how units respond to macro conditions. This framework dominates when common factors drive substantial heterogeneity.

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Citations copied verbatim from the method’s source record. No claim-level verification is inferred from them.

Interactive Fixed Effects Model
Taxonomic method record · regression-model / econometrics
  • Bai, J. (2009). Panel data models with interactive fixed effects. Econometric Reviews, 28(4), 289-312. · URL
  • Moon, H. R., & Weidner, M. (2015). Linear regression for panel with unknown number of factors as interactive fixed effects. Econometric Theory, 31(5), 1046-1087. · DOI 10.3982/ecta9382
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Related methods

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Same method familyGlobal VARmachine-suggested · Relational suggestion, not evidence.Same method familyPanel VARXmachine-suggested · Relational suggestion, not evidence.Same method familyTVP-FAVARmachine-suggested · Relational suggestion, not evidence.

Evidence status

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Sources

2 recorded citations, copied from the method source record.

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