In a panel data study, I understand that individual fixed effects allow to study the time series of the data, and time fixed effects the cross-section. What about both? what is the meaning of the beta coefficient in this case?

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#### Best Answer

Including fixed effects (time, indidvidual or both) does not change the meaning of beta coefficients. You could just see fixed effects as a means to control for shocks in different time periods (i.e. time fixed effects) or individual characteristics that we cannot control for (i.e. individual fixed effects).

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