This paper examines the robustness of explanatory variables in cross-country economic growth regressions. It employs a novel approach, Bayesian Averaging of Classical Estimates ¤ (BACE), which constructs estimates as a weighted average of OLS estimates for every possible combination of included...

"For United States annual data that include World War II, the estimated multiplier for temporary defense spending is 0.4–0.5 contemporaneously and 0.6-0.7 over 2 years. If the change in defense spending is "permanent" (gauged by Ramey's defense-news variable), the multipliers are higher by...