Growth and Volatility Reconsidered: Reconciling Opposite Views

Table 5

Panel unit root test [38].

Variable	Level		First difference
	Constant	Constant + trend	Constant	Constant + trend
Log of GDP	12.4454	0.78674	−13.409***	−9.96431***
GDP volatility	−4.9473***	−6.3950***	−19.0850***	−16.803***
Consumption volatility	−4.3329***	−4.0761***	−19.6400***	−16.336***
Investment volatility	−20.811***	−6.1437***	−4.4186***	−18.687***
Gov. consumption volatility	−5.6580***	−2.6002***	−20.813***	−17.653***
Investment share of GDP	−0.7502	−2.8268**	−17.7615***	−14.5888***
Log of population	6.6528	−1.0168	−4.4148***	−3.1863***
Education	−0.2669	1.5139	−3.1892***	−8.4𝐸+12 ***

 ^{***, **}Rejection of the null hypothesis of the presence of a unit root at 1% and 5% level of significance.
The choice of the optimal lag for the underlying autoregressive equation is based on the Schwarz identification criterion (SIC).