Table 11: Dependent variable: growth rate of per capita GDP. Regressors: lagged growth rate of per capita GDP, 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.

Dynamic models weighted estimations
Estimation LSDV LSDV LSDV LSDV LSDV LSDV
IV 2sls IV 2sls IV 2sls

GDP volatility −0.042 0.396* −0.271*** 0.436*
(−0.46) (1.92) (−2.71) (1.76)
Consumption volatility −0.583***−0.683***−0.515***−0.630***
(−4.67) (−5.06) (−3.51) (−3.85)
Investment volatility 0.074***−0.200 −0.120 −0.114
(2.38) (−0.34) (−0.31) (−1.64)
Government consumption volatility 0.013 −0.030 −0.075 −0.122
(0.11) (−0.20) (−0.49) (−0.79)
GDP growth ( ) 0.183*** 0.142*** 0.142*** 0.430*** 0.399*** 0.399***
(4.70) (3.59) (3.61) (8.65) (7.92) (7.92)
Education 0.004 0.005 0.005 0.005 0.005 0.005
(0.86) (1.19) (1.28) (0.88) (1.00) (0.98)
Population growth −0.282 −0.378 −0.414 0.518 0.360 0.346
(−0.87) (−1.17) (−1.28) (1.32) (0.92) (0.77)
Initial GDP −0.032***−0.139 −0.120 −0.036***−0.019*−0.017
(−4.07) (−1.59) (−1.34) (−3.68) (−1.80) (−1.56)
Investment share of GDP 0.092*** 0.093*** 0.093***−0.096***−0.099***−0.096***
(8.20) (8.30) (8.30) (−4.96) (−4.98) (−4.99)
Observations 725 725 725 675 675 675
Country dummies Yes Yes Yes Yes Yes Yes
Instruments No No No Yes Yes Yes
Kleibergen-Paap Wald statistic 275.699 269.17 268.73
Sargan test ( value) 0.136 0.166 0.208

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