In this paper I try to move away from the Extreme Bounds method of identifying robust empirical relations in the economic growth literature. Instead of analyzing the extreme bounds of the estimates of the coefficient of a particular variable, I analyze the entire distribution. My claim in this paper is that, if we do this, the picture emerging from the empirical growth literature is not the pessimistic Nothing is Robust that we get with the extreme bound analysis. Instead, we find that a substantial number of variables can be found to be strongly related to growth.

This paper examines the robustness of explanatory variables in cross-country economic growth regressions. It introduces and employs a novel approach, Bayesian Averaging of Classical Estimates (BACE), which constructs estimates by averaging OLS coefficients across models. The weights given to individual regressions have a Bayesian justification similar to the Schwarz model selection criterion. Of 67 explanatory variables we find 18 to be significantly and robustly partially correlated with long-term growth and another three variables to be marginally related. The strongest evidence is for the relative price of investment, primary school enrollment, and the initial level of real GDP per capita.

The neoclassical growth model accords with empirical evidence on convergence if capital is viewed broadly to include human investments, so that diminishing returns to capital set in slowly, and if differences in government policies or other variables create substantial differences in steady-state positions. However, open-economy versions of the theory predict higher rates of convergence than those observed empirically. We show that the open-economy model conforms with the evidence if an economy can borrow to finance only a portion of its capital, for example, if human capital must be financed by domestic savings.

Longevity Complementarities under Competing Risks by William H. Dow, Tomas J. Philipson and Xavier Sala-i-Martin. Published in volume 89, issue 5, pages 1358-1371 of American Economic Review, December 1999