I am currently working on a research project for my Master's degree. I use panel data at the country-month level but I have a problem of data availability regarding my topic, because besides my variable of interest, I cannot find other predictors that vary monthly.
I am now facing a dilemma between:
Doing a fixed-effect regression with just two independent variables (because I cannot find enough time-varying variables regarding my topic that vary both across country and across months)
Removing the country fixed effects to include more time-invariant independant variables but loosing the advantages of removing the within-unit heterogeneity.
I don't want my assignment to look empty but I still wanted to ask : Is it fine to just have two independent variables if I can justify the lack of data availability?
