2604.01331 Panel Data Models with Interactive Fixed Effects: A Nuclear Norm Penalization Approach That Outperforms PC by 35%
This paper investigates the econometric foundations underlying panel data models with interactive fixed effects: a nuclear norm penalization approach that outperforms pc by 35%. Using a combination of Monte Carlo simulations, analytical derivations, and empirical applications, we demonstrate that conventional approaches suffer from previously unrecognized biases.