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Fast and reliable computation of generalized synthetic controls

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  • Becker, Martin
  • Klößner, Stefan

Abstract

Given that existing implementations of synthetic control methods are plagued by serious weaknesses, new methods are offered for calculating synthetic control units. In particular, it is shown how to detect and handle important special cases that have yet to be addressed. Numerical methods for fast and reliably solving the nested optimization associated with the standard case are also discussed. An open source implementation of the presented methods is provided with the R package MSCMT, which can also be applied to generalizations of ‘standard’ synthetic control methods.

Suggested Citation

  • Becker, Martin & Klößner, Stefan, 2018. "Fast and reliable computation of generalized synthetic controls," Econometrics and Statistics, Elsevier, vol. 5(C), pages 1-19.
    • Handle: RePEc:eee:ecosta:v:5:y:2018:i:c:p:1-19
    DOI: 10.1016/j.ecosta.2017.08.002
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    4. Thales A. P. West & Sven Wunder & Erin O. Sills & Jan Borner & Sami W. Rifai & Alexandra N. Neidermeier & Andreas Kontoleon, 2023. "Action needed to make carbon offsets from tropical forest conservation work for climate change mitigation," Papers 2301.03354, arXiv.org.
    5. César Martinelli & Marco Vega, 2019. "The Economic Legacy of General Velasco: Long-Term Consequences of Interventionism," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 42(84), pages 102-133.
    6. Lucke, Bernd, 2022. "Growth Effects of European Monetary Union: A Synthetic Control Approach," MPRA Paper 115373, University Library of Munich, Germany.
    7. David Gilchrist & Thomas Emery & Nuno Garoupa & Rok Spruk, 2023. "Synthetic Control Method: A tool for comparative case studies in economic history," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 409-445, April.
    8. Pekka Malo & Juha Eskelinen & Xun Zhou & Timo Kuosmanen, 2024. "Computing Synthetic Controls Using Bilevel Optimization," Computational Economics, Springer;Society for Computational Economics, vol. 64(2), pages 1113-1136, August.
    9. Lucke, Bernd, 2022. "Growth Effects of European Monetary Union: A Synthetic Control Approach," MPRA Paper 120662, University Library of Munich, Germany, revised 27 Mar 2024.
    10. Essers, Dennis & Ide, Stefaan, 2019. "The IMF and precautionary lending: An empirical evaluation of the selectivity and effectiveness of the Flexible Credit Line," Journal of International Money and Finance, Elsevier, vol. 92(C), pages 25-61.
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