Estimation of simultaneous system of spatial dynamic equation models with spatially corrected blundell bond method of moment (scbb-gmm)

The purpose of this paper is used to estimate spatial dynamic simultaneous equations models with simultaneous effects, spatial effects, and time lag effects. Spatial interactions are presented by spatial weight matrices and in addition to dynamics in space and time. Many variables commonly have two direction relationships. Two directions relationship of mutual influence can be summarized in a system of simultaneous equations. In other ways, the relationships of variables are dynamic. In the dynamic panel data models, there is a lag of dependent variable that caused the OLS estimates to be biased and inconsistent. First difference and instrumental variable are needed to overcome this problem. Estimation of parameters in spatial dynamic panel data models with Spatially Corrected Blundell Bond using principles of Generalized Method of Moment (GMM). SCBB-GMM with optimal weights produce parameters that are unbiased, consistent, and efficient.