perfect2 , but it is standard. In oecdpanel, the variable growth is the logarithmic growth rate of GDP, = log Yi,t+1 /Yi,t . We look at logarithms because economic models suggest that the factors which affect growth should multiply together, rather than adding. What’s actually recorded here is the average growth rate over a five-year period, reducing year-to-year accidents. initgdp is log Yi,t , the logarithm of per-capita GDP at the start of each five-year period. A country’s investment rate is the fraction…
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