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The Nexus between Improvements in Economic Freedom and Growth: Evidence from CEE Countries in Transition

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  • Gurgul, Henryk
  • Lach, Łukasz

Abstract

This study examines the causal links between improvements in economic freedom and changes in GDP per capita of new EU members in transition in the period 2000-2009. The empirical results suggest significant causality running from changes in monetary and fiscal freedom, trade openness, regulation of credit, labour, and business, legal structure and security of property rights, and access to sound money to movements in GDP per capita, especially in less and moderately developed CEE transition countries. Moreover, we find evidence that improvements in economic freedom are one of the main factors stimulating the convergence of these economies towards rich EU members. The evidence of causality in the opposite direction is much weaker.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 52260.

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Date of creation: 2011
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Handle: RePEc:pra:mprapa:52260

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Keywords: economic growth; economic freedom; CEE transition economies.;

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Cited by:
  1. Gurgul, Henryk & Lach, Łukasz, 2014. "Globalization and economic growth: Evidence from two decades of transition in CEE," MPRA Paper 52231, University Library of Munich, Germany.

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