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Is There Feed-Back Between Economic Freedom and Economic Growth: A Comparative Granger-Causality Test Based On Quartiles

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  • Webster, A.L.

Abstract

Considerable research has been offered as to the impact of measured levels of economic freedom on economic growth in national economies. However, much less attention has been devoted to the manner in which economic prosperity might foster economic liberties. The intent of this paper is to search for the direction of causation pertaining to economic expansion and increased measures of freedom. A panel study provided by the Fraser Institute serves as the primary source for the data for the index of economic freedom. Granger-causality methodology is used in the analysis. While past research has focused on several pertinent aspects pertaining to this relationship, it seems a little attention has been given to any differences in this relationship that might prevail across national levels of wealth. This paper addresses this unfortunate deficiency by separating the nations into quartiles and examining the economic growth-economic freedom relationship with and each sub-division.

Suggested Citation

  • Webster, A.L., 2013. "Is There Feed-Back Between Economic Freedom and Economic Growth: A Comparative Granger-Causality Test Based On Quartiles," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(1), pages 11-24.
    • Handle: RePEc:eaa:aeinde:v:13:y:2013:i:1_2
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