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Effects of Economic Freedom on Growth and the Environment - Implications for Cross-Country Analysis

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Author Info
Lundström, Susanna (Department of Economics, School of Economics and Commercial Law, Göteborg University)
Abstract

The purpose of this paper is to discuss the effects of specific economic freedom categories on both economic growth and the environment, and present some important considerations for cross-country regressions. First, there is a survey of arguments for positive as well as negative effects of economic liberalization. Measurement problems are then considered followed by a number of model specification issues. Sensitivity tests and potential econometric problems are also discussed. The main conclusion is that decomposition is important since different economic freedoms can be expected to have different effects on growth and the environment, and are dependent on different interacting factors. The theoretical insights have a crucial role when it comes to selecting what empirical issues to take into account since there is a limit to the number of issues possible to consider. Due to the complexity of the links, a lot of effort should also be devoted to sensitivity tests.

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Publisher Info
Paper provided by Göteborg University, Department of Economics in its series Working Papers in Economics with number 115.

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Length: 35 pages
Date of creation: 05 Nov 2003
Date of revision:
Handle: RePEc:hhs:gunwpe:0115

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Postal: Department of Economics, School of Business, Economics and Law, Göteborg University Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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Related research
Keywords: Cross-country regressions; Economic freedom; Economic growth; Environmental quality; Institutions;

Find related papers by JEL classification:
C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
P00 - Economic Systems - - General - - - General

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References listed on IDEAS
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