Cluster Option in -Xtreg, fe-

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Cluster Option in -Xtreg, fe-

Amin Mohseni
Dear Stata List:

I have a panel data of 51 states over 26 years.

I understand that if I suspect that there is within panel residual
correlation, then I have use the cluster option with -xtreg, fe- to
correct for the correlation factor in my SEs.

I suspect that such a situation might be true for my data. But when I
run Wooldbridge's -xtserial- test after -xtreg, fe- it says that there
is no auto-correlation in my residuals.

Does this mean that I should not use cluster option with -xtreg, fe- ?

many thanks for your help
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