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The Impact of Economic Freedom on Economic Growth? New European Dynamic Panel Evidence

Author

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  • Ivana Brkić

    (Faculty of Economics and Engineering Management in Novi Sad, University Business Academy in Novi Sad, 21000 Novi Sad, Serbia)

  • Nikola Gradojević

    (Lang School of Business and Economics, University of Guelph, Guelph, ON N1G 2W1, Canada
    Faculty of Technical Sciences, University of Novi Sad, 21000 Novi Sad, Serbia)

  • Svetlana Ignjatijević

    (Faculty of Economics and Engineering Management in Novi Sad, University Business Academy in Novi Sad, 21000 Novi Sad, Serbia)

Abstract

This paper analyzes the impact of economic freedom along with traditional economic factors on economic growth for a panel of European countries. The growth of the gross domestic product was observed over a twenty-year time period on a sample of 43 developing and developed countries. Based on a robust dynamic panel setting, we conclude that increases in economic freedom as expressed by the Index of Economic Freedom/Heritage Foundation (but not its levels) are related to economic growth. The EU membership status either had no effect or it curbed the effect of the economic freedom on growth. We also find that the subprime economic crisis of 2008–2009 exerted a negative impact on the growth of European economies.

Suggested Citation

  • Ivana Brkić & Nikola Gradojević & Svetlana Ignjatijević, 2020. "The Impact of Economic Freedom on Economic Growth? New European Dynamic Panel Evidence," JRFM, MDPI, vol. 13(2), pages 1-13, February.
    • Handle: RePEc:gam:jjrfmx:v:13:y:2020:i:2:p:26-:d:316467
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