Economic Freedom, Pandemics and Robust Political Economy
Southern Economic Journal, Volume 87, Issue 4, April 2021, Pages 1250-1266
24 Pages Posted: 15 Dec 2020 Last revised: 7 Dec 2021
Date Written: December 11, 2020
What is the relationship, if any, between economic freedom and pandemics? This paper addresses this question from a robust political economy approach. As is the case with recovery from natural disasters or warfare, a society that is relatively free economically offers economic actors greater flexibility to adapt to pandemics. We argue that societies that are more economically free will be more robust to the impact from pandemics, illustrated by shorter time for economic recovery. We illustrate this relationship by testing how initial levels of economic freedom (at the start of the major influenza pandemics of the 20th century) temper contractions and accelerate recoveries for 20 OECD countries.
Keywords: Economic Freedom; Pandemics; Robust Political Economy
JEL Classification: B51, H12, P52
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