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which accounts for aggregate time effects and allows for controls, xit. Estimation by FE or FD to remove ci is standard, provided the policy indicator, wit, is strictly exogenous: correlation beween wit and uir for any t and r causes inconsistency in both estimators (with FE having some advantages for larger T if uit is weakly dependent) What if designation is correlated with unit-specific trends? “Correlated random trend” model:

yit ci git t wit xituit

where gi is the trend for unit i. A general analysis allows arbitrary corrrelation between ci, giand wit, which requires at least T 3. If we first difference, we get, for t 2, . . . , T,

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