Table 13: 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 (21 countries). Horizon: 1978–2007. Annual observations. All regressions include year dummies. All regressions are population weighted.

Dynamic models weighted estimations—restricted sample
Estimation LSDV LSDV LSDV LSDV LSDV LSDV-IV
IV 2sls IV 2sls IV 2sls

GDP volatility 0.197* 0.511** 0.006 0.584**
(1.78) (2.40) (0.04) (2.40)
Consumption volatility −0.825*** −0.889***−0.731***−0.800***
(−5.61) (−5.97) (−4.46) (−4.84)
Investment volatility 0.094*** −0.026 0.019 −0.113*
(2.95) (−0.44) (0.53) (−1.69)
Government consumption volatility −0.052 −0.070 −0.124 −0.159
(−0.47) (−0.63) (−0.96) (−1.23)
GDP growth ( ) 0.331*** 0.272*** 0.267*** 0.497*** 0.457*** 0.445***
(7.95) (6.43) (6.34) (10.16) (9.14) (8.96)
Education 0.001 0.003 0.003 0.002 0.005 0.004
(0.21) (0.86) (0.87) (0.55) (1.04) (0.90)
Population growth 0.104 0.161 0.187 0.58 0.525 0.549
(0.29) (0.46) (0.54) (1.42) (1.30) (1.36)
Initial GDP −0.025**−0.017*−0.146 −0.021*−0.013 −0.011
(−2.51) (−1.73) (−1.50) (−1.89) (−1.22) (−0.95)
Investment share of GDP 0.049*** 0.053*** 0.052***−0.063***−0.064***−0.063***
(4.66) (5.12) (5.05) (−4.17) (−4.23) (−4.20)
Observations 609 609 609 567 567 567
Country dummies yes yes yes yes yes yes
Instruments no no no yes yes yes
Hansen /Sargan test ( value) 0.178 0.196 0.200
Kleibergen-Paap Wald statistic 348.850 344.011 346.559

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