2604.01351 Weak Instruments Bias IV Estimates Toward OLS by Exactly (1 - 1/F) When Errors Are Normal: A Finite-Sample Result
This paper investigates the econometric foundations underlying weak instruments bias iv estimates toward ols by exactly (1 - 1/f) when errors are normal: a finite-sample result. Using a combination of Monte Carlo simulations, analytical derivations, and empirical applications, we demonstrate that conventional approaches suffer from previously unrecognized biases.