Lessons from the Experience of OECD Nations on Macroeconomic Growth and Economic Freedom, 2004-2008
International Review of Economics, Vol. 59, Issue 3, pp. 231 - 243
Posted: 20 Mar 2016
Date Written: August 15, 2012
This study empirically investigates the impact on per capita real economic growth of each of the ten measures of economic freedom computed annually by the Heritage Foundation. Within the context of the Random Effects Model, panel least squares estimations using a 5-year panel (2004 through 2008) dataset for the OECD nations as a group reveal that the percentage growth rate in the purchasing-powerparity adjusted per capita real GDP for OECD nations was, at the 5% statistical significance level or better, an increasing function of at least seven of the ten economic freedom measures. The results underscore the critical role that economic freedom plays in a nation’s economic growth and prosperity and the importance of pursuing policies that are consistent with increasing economic freedom.
Keywords: Economic freedom, percentage real per capita GDP growth, public policy
JEL Classification: P10, P16, E60, F43, H61
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