Table 6: 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.

Static models estimations
Estimation FE FE FE FE-IV GMM FE-IV GMM FE-IV GMM

GDP volatility −0.127 0.177 −0.417* −0.981
(−0.88) (0.69) (−1.93) (−1.62)
Consumption volatility −0.549*** −0.613*** −0.907** −0.525***
(−3.28) (−3.46) (−3.06) (−2.50)
Investment volatility 0.049 0.012 0.154 0.334*
(1.18) (0.21) (1.56) (1.77)
Government consumption volatility 0.460*** 0.443*** 0.323* 0.442***
(3.83) (3.72) (1.86) (2.71)
Education 0.003 0.003 0.003 0.005 0.002 0.003
(0.58) (0.66) (0.50) (0.60) (0.31) (0.51)
Population growth −0.736* −0.823** −0.863** 0.501 0.340 0.542
(−1.72) (−2.04) (−2.21) (0.89) (0.67) (1.00)
Initial GDP −0.050*** −0.032** −0.031**−0.066*** −0.035** −0.041**
(−3.52) (−2.23) (−2.20) (−4.15) (−2.11) (−2.58)
Investment share of GDP 0.084*** 0.083*** 0.084***−0.106*** −0.084*** −0.082***
(6.73) (7.19) (7.26) (−3.28) (−3.22) (−3.25)
Observations 750 750 750 675 675 675
Instruments no no no yes yes yes
Hansen statistic ( value) 0.321 0.76 0.87
Kleibergen-Paap Wald statistic 69.231 41.711 27.638

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