1,260,122 research outputs found
Economic Freedom and New Economic Paradigm
Are economic freedoms going to clear our way to prosperity? Is the growth of economic freedoms our path to prosperity? Is it in the base of the new understanding of development? If yes, what will necessarily have to be changed in the economic practice of every country and whole world in general? What will be changed in economic theory? What are potential consequences of an attempt to offer resistance to the new concept of development? These are just some of the questions discussed in this paper,whereas the starting point is the economy and economic development of Montenegro.Economic Freedom, Economic Paradigm, Global economy, National state
Does economic freedom increase income inequality? Evidence from the EU countries
Over the past decades there have been considerable changes in policies and institutions in favor of economic freedom in the EU countries. This trend coincides with widespread increases in income inequality in numerous member states. To what extent does economic freedom encourage inequality? This paper examines the relationship between economic freedom and income inequality in the EU countries using panel data for the 2000s. The empirical evidence suggests that economic freedom seems to entail greater income inequality. However, not all areas of economic freedom affect income distribution similarly. While government size and regulation appear to be robustly associated with income inequality, legal system and property rights, sound money, and freedom to trade internationally seem not to be significantly related with income distribution in the European context.Universidad de Málaga. Campus de Excelencia Internacional AndalucĂa Tech
Forced to Freedom? Empirical Relations between Aid and Economic Freedom
The paper explores the relationships between economic freedom on the one side and development aid and IMF credit as approximation for conditional aid on the other side. After a short review of current literature on the issue of economic development, economic freedom, aid, and IMF credit, the paper develops a simple panel regression model to evaluate the relationship between “economic freedom” as dependent variable and “aid” and “IMF credit” as independent variables. The estimation is based upon data taken from the World Bank’s World Development Indicators and the Heritage Index of Economic Freedom. In contrast to previous research, our results allow the rejection of the hypothesis that IMF credit increases economic freedom and that aid is not contributing to economic freedom. The estimation results suggest that, firstly, aid is positively correlated with economic freedom, and secondly, that IMF credit is negatively correlated with economic freedom. Taking IMF credit as proxy for conditional aid, we conclude that for the period of observation it could not be shown that countries can be forced to economic freedom by aid conditions.aid, economic freedom, IMF credit, economic development
Corruption and the Institutional Environment for Growth
Several cross-country studies have found that corruption is detrimental to economic growth, but the findings are not universally robust. We utilize the economic freedom index to examine if corruption can facilitate growth by allowing entrepreneurs to avoid inefficient policies and regulations when economic freedom is limited. Using regression analysis, we find that corruption is growth enhancing when economic freedom is most limited but the beneficial impact of corruption decreases as economic freedom increases. Not all areas of economic freedom affect the corruption-growth relationship equally. In particular, we find that when we analyze individual areas of economic freedom the beneficial effect of corruption disappears most quickly when the size of government and the extent of regulation decrease.Corruption; Economic Freedom; Growth
Is Globalization What It’s Cracked Up to Be? Economic Freedom, Corruption, and Human Development
This paper examines the effect of economic globalization on human development and argues that the relation between economic globalization and human development is mediated by economic freedom and corruption. Findings suggest that economic globalization affects economic freedom positively and corruption negatively. In turn, economic freedom has a positive effect and corruption has a negative effect on human development. All relations are in the hypothesized directions and significant. Research, business, and public policy implications as well as directions for future research are presented
Economic Freedom: Theory First, Empiricism After
The aim of this paper is to argue in favor of theoretically well-founded empirical examinations on how economic freedom affects economic performance, which is not the case, as we argue, in most of the huge empirical literature developed after the construction of various indexes of economic freedom. In this spirit we develop a concept of economic freedom based on Hayek (1960): absence of coercion except for state coercion to enforce known general rules. Trying to formulate Hayek’s ideas on a less abstract level, as a step further we propose a categorization of government actions, which gives us some guidance about which government actions hurt and which do not hurt economic freedom. Our concept of economic freedom allows us to conceptualize the measurement of economic freedom in a different way from the indexes of economic freedom.
Theory and evidence on economic freedom and economic growth: A comment
Altman (2007) examines the impact of economic freedom, including its various component parts, on aggregate economic performance across countries. He claims that some of the component parts of economic freedom, measured primarily with the Economic Freedom of the World index, are correlated positively with higher levels of per capita income and growth while others are not. He also attempts to identify "threshold effects" within the data that indicate differential impacts of economic freedom on economic performance at different levels. Although both questions are worthwhile, ultimately his efforts are unconvincing for both theoretical and empirical reasons which we discuss.economic freedom
Economic Freedom and Growth:Decomposing the Effects
Most studies of the relation between economic freedom and growth of GDP have found a positive relation. One problem in this area is the choice of economic freedom measure. A single measure does notreflect the complex economic environment and a highly aggregated index makes it difficult to draw policy conclusions. In this paper we investigate what specific types of economic freedom measures that are important for growth. The robustness of the results is carefully analysed since the potential problem with multicollinearity is one of the negative effects of decomposing an index. The results show that economic freedom does matter for growth. This does not mean that increasing economic freedom, definedin general terms, is good for economic growth since some of the categories in the index are insignificant and some of the significant variables have negative effects.Economic growth; Economic freedom
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