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I want to estimate the impact of economic sanctions on GDP and other macroeconomic indicators on Italy in 1935 with DID. I have observations of GDP of Italy (treated) and of other countries (control) from 1929 to 1938. I created a time dummy equal to 1 if the Year is >= 1935 and a treatment dummy that is equal to 1 if the observation is for Italy (treatment group). I want to add pre and post treatment dummies for 3 years before and after the sanctions. My questions are:
1)Should I generate a dummy for every year pre and post treatment I want to consider? And how should the pre and post treatment dummies look like? For example, the pre-treatment dummy for 1934 (t= -1) should be equal to 1 only in 1934 and 0 in all other years, or it should be equal to 1 if year >=1934? And the post-treatment dummy for 1936 is equal to 1 only in 1936 or if Year >= 1936?
2)What should my regression look like with pre and post treatment dummies?
My dataset looks like this:
