I have data on 25 countries for about 35 years. I want to estimate a POLS as I am not looking for a causal interpretation but just sttistical correlation between two phenomena. That's why I will not go for fixed effects.
1) Do you think that can be wrong?
Since the dependent variable is quite persistent,
2) does it make sense to estimate a dynamic pooled ols with lagged dependent variable? Or this can be omitted since I am not looking for causality?