Hi
I perform panel data on the model Fixed effects and random effects models
Yit = ai + bi Xit-1 + ei
The reviewer insists that there is an endogeneity problem and that I must perform GMM
I have read that there is endogeneity problem if one independent variable is the lagged dependent variable Yit = ai + ci Yit-1+ bi Xit + ei
Is it right? If so, how to convince the reviewer?