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Economic Freedom and the Environment for Economic Growth

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Author Info
James D. Gwartney
Robert A. Lawson
Randall G. Holcombe

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Abstract

Modern growth theory, built on the foundation of Solow [1956], emphasizes growth in inputs and technological advances as the underlying causes of economic growth. More recent work has emphasized the importance of market institutions and economic freedom as prerequisites for growth. This paper empirically examines the importance of economic freedom by using an index that measures economic freedom in four basic areas - money and inflation, economic structure, takings and discriminatory taxation, and international trade. The empirical results show that economic freedom is a significant determinant of economic growth, even when human and physical capital, and demographics are taken into account. (JEL: O 40)

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Publisher Info
Article provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.

Volume (Year): 155 (1999)
Issue (Month): 4 (December)
Pages: 643-
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Handle: RePEc:mhr:jinste:urn:sici:0932-4569(199912)155:4_643:efatef_2.0.tx_2-t

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  1. Peter Egger & Hannes Winner, 2003. "Does Contract Risk Impede Foreign Direct Investment?," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 139(II), pages 155-172, June. [Downloadable!]
  2. Issouf Samaké, 2008. "Investment and Growth Dynamics: An Empirical Assessment Applied to Benin," IMF Working Papers 08/120, International Monetary Fund. [Downloadable!]
  3. Carlsson, Fredrik & Lundström, Susanna, 2001. "Economic Freedom and Growth:Decomposing the Effects," Working Papers in Economics 33, Göteborg University, Department of Economics. [Downloadable!]
    Other versions:
  4. Ossama Mikhail, 2004. "Economic Freedom and The Business Cycle: The Egyptian Experience," Macroeconomics 0402002, EconWPA. [Downloadable!]
  5. Geoffrey Brennan & Hartmut Kliemt, 2008. "Regulation and revenue," Constitutional Political Economy, Springer, vol. 19(3), pages 249-260, September. [Downloadable!] (restricted)
  6. Alexei Kireyev, 2002. "Liberalization of Trade in Financial Services and Financial Sector Stability (Analytical Approach)," IMF Working Papers 02/138, International Monetary Fund. [Downloadable!]
  7. Heckelman, Jac C. & Powell, Benjamin, 2008. "Corruption and the Institutional Environment for Growth," Working Papers 2008-6, Suffolk University, Department of Economics. [Downloadable!]
  8. Zane Spindler & Xavier Vanssay & Vincent Hildebrand, 2008. "Using Economic Freedom Indexes as Policy Indicators: An Intercontinental Example," Public Organization Review, Springer, vol. 8(3), pages 195-214, September. [Downloadable!] (restricted)
  9. Lundström, Susanna, 2002. "Decomposed Effects of Democracy on Economic Freedom," Working Papers in Economics 74, Göteborg University, Department of Economics. [Downloadable!]
  10. Art Carden, 2009. "Inputs and institutions as conservative elements," The Review of Austrian Economics, Springer, vol. 22(1), pages 1-19, March. [Downloadable!] (restricted)
  11. Miroslav Prokopijevic, 2002. "Does growth further improve economic freedom?," ICER Working Papers 16-2002, ICER - International Centre for Economic Research. [Downloadable!]
  12. CHU, Yun-Peng & KONG, Tuan-Yuen, 2009. "The Impact Of The Political Liberalization-Economic Freedom Nexus On Economic Growth, 1970-2000," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 9(2). [Downloadable!] (restricted)
  13. Russell Sobel & J. Clark & Dwight Lee, 2007. "Freedom, barriers to entry, entrepreneurship, and economic progress," The Review of Austrian Economics, Springer, vol. 20(4), pages 221-236, December. [Downloadable!] (restricted)
  14. Carlsson, Fredrik & Lundström, Susanna, 2000. "The Effects of Economic and Political Freedom on CO2 Emissions," Working Papers in Economics 29, Göteborg University, Department of Economics, revised 21 Aug 2001. [Downloadable!]
  15. Christian Bjørnskov & Nicolai Foss, 2008. "Economic freedom and entrepreneurial activity: Some cross-country evidence," Public Choice, Springer, vol. 134(3), pages 307-328, March. [Downloadable!] (restricted)
    Other versions:
  16. Eric Crampton, 2002. "You Get What You Vote For: Electoral Determinants of Economic Freedom," Public Economics 0211003, EconWPA. [Downloadable!]
  17. Judit Kapás & Pál Czeglédi, 2007. "Economic Freedom: Theory First, Empiricism After," ICER Working Papers 10-2007, ICER - International Centre for Economic Research. [Downloadable!]
  18. Tue Gørgens & Martin Paldam & Allan H. Würtz, 2005. "Growth, Income and Regulation: a Non-Linear Approach," CAM Working Papers 2005-12, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics. [Downloadable!]
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