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Instrumental variable regression

1. In the first part, please describe the main issue and the method at hand including a critical assessment of the method, 5 pages, 5 sources. 
2. In the second part, present an application of the method in any economics-related topic including a literature reviiew, 10 pages, 20 sources.

Once there is endogeneity, e.g. reverse causality, one can use the variation of a variable that is correlated with the endogenous variable, but not affected by the dependent variable.

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