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We show that information reduction methods provide a useful and practical solution to this and related problems. Formally, we propose factor\u2010based modifications to three popular weak\u2010instrument\u2010robust statistics, and illustrate their validity asymptotically and in finite samples. Results are derived using asymptotic settings that are commonly used in both the factor and weak\u2010instrument literature. For the Anderson\u2013Rubin statistic, we also provide analytical finite\u2010sample results that do not require any underlying factor structure. An illustrative Monte Carlo study reveals the following. Factor\u2010based tests control size regardless of instruments and factor quality. All factor\u2010based tests are systematically more powerful than standard counterparts. With informative instruments and in contrast to standard tests: (i) power of factor\u2010based tests is not affected by <jats:italic>k<\/jats:italic> even when large; and (ii) weak factor structure does not cost power. An empirical study on a New Keynesian macroeconomic model suggests that our factor\u2010based methods can bridge a number of gaps between structural and statistical modeling. Copyright \u00a9 2015\u2009John Wiley &amp; Sons, Ltd.<\/jats:p>","DOI":"10.1002\/jae.2466","type":"journal-article","created":{"date-parts":[[2015,4,17]],"date-time":"2015-04-17T09:37:22Z","timestamp":1429263442000},"page":"821-842","source":"Crossref","is-referenced-by-count":13,"title":["Factor\u2010Based Identification\u2010Robust Interference in IV Regressions"],"prefix":"10.1002","volume":"31","author":[{"given":"Georges","family":"Kapetanios","sequence":"first","affiliation":[{"name":"School of Economics and Finance Queen Mary, University of London  UK"}],"role":[{"role":"author","vocabulary":"crossref"}]},{"given":"Lynda","family":"Khalaf","sequence":"additional","affiliation":[{"name":"Department of Economics Carleton University  Ottawa Ontario Canada"}],"role":[{"role":"author","vocabulary":"crossref"}]},{"given":"Massimiliano","family":"Marcellino","sequence":"additional","affiliation":[{"name":"Department of Economics and IGIER Bocconi University Milan Italy and CEPR  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