Examining the Hayek-Friedman Hypothesis on Economic and Political Freedom

Journal of Economic Behavior & Organization, 2010

12 Pages Posted: 22 Jan 2015

See all articles by Robert A. Lawson

Robert A. Lawson

Auburn University - Department of Finance

J. R. Clark

The University of Tennessee at Chattanooga

Date Written: 2010

Abstract

This paper examines empirically the hypothesis made famous by Nobel Laureates Friedrich A. Hayek and Milton Friedman that societies with high levels of political freedom must also have high levels of economic freedom. In our judgment, the Hayek-Friedman hypothesis holds up fairly well to historical scrutiny. Using data on economic and political freedom for a sample of up to 123 nations back as far as 1970, we find relatively few instances of societies combining relatively high political freedom without relatively high levels of economic freedom. In addition, we find that these cases are diminishing over time. Finally, we examine several cases of countries on different economic and political freedom journeys.

Keywords: Economic Freedom, Political Freedom, Hayek, Milton Friedman

JEL Classification: P5, O5

Suggested Citation

Lawson, Robert A. and Clark, Jeff R., Examining the Hayek-Friedman Hypothesis on Economic and Political Freedom (2010). Journal of Economic Behavior & Organization, 2010. Available at SSRN: https://ssrn.com/abstract=2552917

Robert A. Lawson

Auburn University - Department of Finance ( email )

Auburn, AL 36849
United States

Jeff R. Clark (Contact Author)

The University of Tennessee at Chattanooga ( email )

Department of Economics
Suite 313 Fletcher Hall
Chattanooga, TN 37403-2598
United States

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