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?

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