Table 10: Dependent variable: growth rate of per capita GDP. Regressors: volatility of GDP growth, consumption growth, investment growth, government consumption growth, and control variables. Sample: OECD countries (25 countries). Horizon: 1978–2007. Annual observations. All regressions include year dummies. All regressions are population weighted.

Static models weighted estimations
Estimation FE FE FE FE-IV 2sls FE-IV 2sls FE-IV 2sls

GDP volatility –0.073 0.311 –0.476*** –1.790**
(–0.89) (1.55) (–3.94) (–2.84)
Consumption volatility –0.687***–0.766***–1.337***–0.882***
(–5.75) (–5.90) (–6.79) (–4.68)
Investment volatility 0.086*** 0.116 0.202*** 0.625***
(2.83) (0.21) (3.08) (3.11)
Government consumption volatility 0.066 0.036 –0.058 0.136
(0.57) (0.753) (–0.34) (0.73)
Education 0.006 0.007* 0.008** 0.003 0.006 0.006
(1.45) (1.94) (2.03) (0.55) (0.95) (0.99)
Population growth –0.048 –0.203 –0.223 1.332*** 1.05** 1.297***
(–0.15) (–0.65) (–0.72) (2.88) (2.38) (2.70)
Initial GDP –0.042*** –0.016** –0.017** –0.057*** –0.100 –0.022*
(–5.63) (–2.21) (–2.05) (–5.18) (–0.81) (–1.69)
Investment share of GDP 0.115*** 0.110*** 0.110***–0.132***–0.108***–0.119***
(11.44) (11.07) (11.05) (–5.19) (–4.44) (–4.28)
Observations 750 750 750 675 675 675
Instruments no no no yes yes yes
Sargan statistic ( value) 0.807 0.514 0.852
Kleibergen-Paap Wald statistic 133.016 87.75 40.079

Note: -statistics in parenthesis, robust SEs. *Significance at 10%, **significance at 5%, and ***significance at 1%.