Supplementary Table: GDP_ICRGE

Estimating Expected GDP Growth

A. Predicting GDP Growth with ICRG-E*

OLS

Coeff.

T-Stat

ICRGE

0.002

2.41

R2 within

0.016

CONSTANT

-0.022

-0.99

between

0.182

overall

0.067

OLS with Fixed Effects

Coeff.

T-Stat

ICRGE

0.001

1.63

R2 within

0.016

CONSTANT

-0.015

-0.54

between=

0.182

overall=

0.067

F(16,167) =

4.112

GLS with Panel Specific Heteroskedasticity and Serial Correlation-Country Specific Intercepts

Coeff.

T-Stat

ICRGE

0.001

2.19

Icoun_2

0.006

0.27

Icoun_3

0.038

1.96

Icoun_4

0.011

0.57

Icoun_5

-0.005

-0.25

Icoun_6

0.016

0.79

Icoun_7

0.031

1.24

Icoun_9

0.057

2.51

Icoun_10

-0.030

-0.67

Icoun_11

-0.031

-1.38

Icoun_13

0.008

0.44

Icoun_14

-0.016

-0.64

Icoun_15

0.008

0.29

Icoun_16

0.038

1.42

Icoun_17

0.048

1.91

Icoun_18

0.012

0.58

Icoun_19

-0.016

-0.77

_cons

-0.018

-0.90

*Annual real GDP growth is regressed on the first lag of

ICRG-E is the International Country Risk Guide's Economic Rating. The value of 100 is the highest

possible rating and indicates good prospects. In each panel, three regressions are estimated. The first is

a pooled OLS regression. The second is an OLS regression with fixed effects. The third is a GLS regression

with panel specific heteroskedasticity and serial correlation, as well as country specific intercepts.