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The impact of economic freedom on economic growth

In: Handbook of Research on Economic Freedom

Author

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  • Jakob de Haan
  • Jan-Egbert Sturm

Abstract

This chapter reviews studies on the relation between economic freedom and economic growth. Most studies report a direct positive relation between economic freedom and growth. Many studies are based on cross-country and panel growth models and face problems such as the potential endogeneity of economic freedom and problematic specifications of the growth model used. Apart from studies analyzing the conditioning effects of economic freedom on other drivers of economic growth, and those analyzing the conditioning effect of other factors (such as culture and generalized trust) on the impact of economic freedom on growth, most of the literature surveyed here does not offer major new insights. Even more worrisome is that several methodologies that have been suggested to deal with shortcomings of traditional cross-country and panel growth models have hardly been applied.

Suggested Citation

  • Jakob de Haan & Jan-Egbert Sturm, 2024. "The impact of economic freedom on economic growth," Chapters, in: Niclas Berggren (ed.), Handbook of Research on Economic Freedom, chapter 14, pages 189-207, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:21220_14
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    File URL: https://www.elgaronline.com/doi/10.4337/9781802206159.00024
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    Keywords

    Economics and Finance;

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