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what if you have both omitted variables which are constants across entities but varies over time and constant over time and varies across entities if these are separate variables then you can include both entity fixed effects and time fixed effects so in our example with fatality rate and beer tags the combined entity and time fixed effects regression would be that this is our y variable and this is our x variable and this is the causal relationship which we are interested in and here we have entity fixed effects and we have time fixed effects okay and what these effects do is that they change not the slope but the intercept of the regression so here we have one effect based on the which entity you look at and we have one effect based on which time frame you are looking at and alpha is the entity fixed effects and delta is the time fixed effect so now you control for both these effects okay so you control for any any unobserved variable variable which fits these two characteristics so
