rejected, lending support to the findings. This also holds across the different follow up regressions presented in Tables 2-5.

The empirical results corresponding to the standard growth determinants (see Table 1, columns 1 and 2) are broadly consistent with the literature. Suggesting a beneficial impact on economic growth, the proxies of educational investment, depth of financial intermediation, and trade openness have positive coefficients, though they are not statistically significant for the first two variables. Government consumption and price inflation, on the other hand, carry negative coefficients, indicating the harmful consequence of a large fiscal burden and macroeconomic price instability. More favorable terms of trade (representing external shocks) tend to improve economic growth performance.

Representing global conditions, the period shifts (not shown in the tables to save space) indicate that the international trend in economic growth experienced a declining drift over 1960-2000, resulting in a less favorable external environment in the 1980s and 1990s than in the previous decades. Perhaps surprisingly, initial output per capita shows a positive though not significant coefficient (which tends to change in sign and significance for different samples and growth specifications). It is conjectured that the important changes that have occurred in the most recent decade regarding the roles of macroeconomic volatility and public infrastructure may explain why some of the results appear to differ from the previous literature (see footnote for a more elaborate explanation).<sup>17</sup> Most importantly, the results regarding the growth effects of natural 17 Using data up to 1995 or 2000 (as most previous studies have done), secondary school enrollment and private credit ratio do carry positive and statistically significant coefficients, and the initial level of output per capita has a negative and significant coefficient. So it seems that in the last decade, the relationship of these variables with economic growth has changed in important ways. In preliminary exercises (not reported here), it was found that accounting for macroeconomic volatility and infrastructure provision may be important to understand the role of education, financial intermediation, and initial output. Financial depth, particularly since 1995, has a positive and a negative effect. On the one hand, it represents better intermediation from savings to investment; but on the other, it may be a source of banking crisis. Therefore, controlling for volatility would isolate the beneficial effect. In the case of education and initial output, since both are highly correlated, they would tend to partially capture the convergence effect (negative coefficient) and the better initial conditions effect (positive coefficient). It seems that when an infrastructure proxy is included in the explanatory set, these effects are duly separated: initial output carries a negative (convergence) coefficient, while education and infrastructure capture a positive coefficient. However, most importantly, the results concerning the growth effects of natural disasters are robust to the inclusion of these additional controls. For this reason, the simpler specification is maintained to keep sample size (country coverage and time span) as large as possible.

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