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Lessons from the experience of OECD nations on macroeconomic growth and economic freedom, 2004–2008

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  • Richard Cebula

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  • J. Clark

Abstract

This study empirically investigates the impact on per capita real economic growth of each of the ten measures of economic freedom computed annually by the Heritage Foundation. Within the context of the Random Effects Model, panel least squares estimations using a 5-year panel (2004 through 2008) dataset for the OECD nations as a group reveal that the percentage growth rate in the purchasing-power-parity adjusted per capita real GDP for OECD nations was, at the 5 % statistical significance level or better, an increasing function of at least seven of the ten economic freedom measures. The results underscore the critical role that economic freedom plays in a nation’s economic growth and prosperity and the importance of pursuing policies that are consistent with increasing economic freedom. Copyright Springer-Verlag 2012

Suggested Citation

  • Richard Cebula & J. Clark, 2012. "Lessons from the experience of OECD nations on macroeconomic growth and economic freedom, 2004–2008," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 59(3), pages 231-243, September.
  • Handle: RePEc:spr:inrvec:v:59:y:2012:i:3:p:231-243
    DOI: 10.1007/s12232-012-0162-0
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    References listed on IDEAS

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    1. repec:cto:journl:v:21:y:2002:i:3:p:415-426 is not listed on IDEAS
    2. Dawson, John W., 2003. "Causality in the freedom-growth relationship," European Journal of Political Economy, Elsevier, vol. 19(3), pages 479-495, September.
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    Cited by:

    1. Raymond J. March & Conrad Lyford & Benjamin Powell, 2017. "Causes and barriers to increases in economic freedom," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 64(1), pages 87-103, March.
    2. repec:eee:intman:v:23:y:2017:i:3:p:292-305 is not listed on IDEAS
    3. Yankow, Jeffrey J., 2014. "A Longitudinal Analysis of the Impact of State Economic Freedom on Individual Wages," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 44(1).

    More about this item

    Keywords

    Economic freedom; Percentage real per capita GDP growth; Public policy; P10; P16; E60; F43; H61;

    JEL classification:

    • P10 - Economic Systems - - Capitalist Systems - - - General
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems

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