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Deregulation, economic growth and growth acceleration

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  • Stankov, Petar

Abstract

The paper analyzes the influence of credit-, labor-, and product market deregulation policies on economic growth in more than 70 economies over a period of 30 years. It addresses both the issues of reform measurement and its endogeneity. Specifically, by combining a difference-in-difference strategy with an IV approach to the endogeneity of the reform timing, this work finds that deregulation contributed to the per capita GDP levels of the early reformers relatively more than to the ones of the late reformers. However, the paper also finds that accelerating credit market reforms leads to a large growth acceleration effect for the late reformers, which points to large dynamic welfare gains from deregulation. The latter result suggests that a large-scale credit market re-regulation in the aftermath of the Great Recession is a misguided approach to deal with the consequences of the financial crisis.

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File URL: http://mpra.ub.uni-muenchen.de/26485/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 26485.

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Date of creation: Oct 2010
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Handle: RePEc:pra:mprapa:26485

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Keywords: Deregulation; economic growth; growth acceleration; origins of institutional change;

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  25. Eric Tymoigne, 2009. "Securitization, Deregulation, Economic Stability, and Financial Crisis, Part I--The Evolution of Securitization," Economics Working Paper Archive wp_573_1, Levy Economics Institute.
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