GME Estimation of Spatial Structural Equations Models

The objective of this paper is to develop a GME formulation for the class of spatial structural equations models (S-SEM). In this respect, two innovatory aspects are introduced: (i) the formalization of the GME estimation approach for structural equations models that account for spatial heterogeneity and spatial dependence; (ii) the extension of the methodology to a panel data framework. We also present an application of the method to real data finalized to investigate disparities of unemployment rates in OECD countries over the period 1998-2006.