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Globalization, Freedoms and Economic Convergence: An empirical exploration of a trivariate relationship using a large panel

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  • Jorge Braga de Macedo
  • Joaquim Oliveira Martins
  • João Tovar Jalles

Abstract

Using a large panel for 95 countries and the 1972-2014 period, this paper analyses the interactions among globalization, political & civil rights and economic convergence, through a simultaneous estimation technique. We use a multi-dimensional, de facto, and continuous measures of Freedoms and Globalization. We find a two-way positive relationship between civil liberties & political rights and economic, political and social Globalization, as well as significant two-way relationships with the economic convergence (using as a proxy the ratio of GDP per capita to the US). In this way, we extend the test for the two-way relationship between Democracy and Globalization put forward by Eichengreen and Leblang (2008). Overall, we also find a virtuous cycle between Globalization, Freedoms and Economic convergence, except for non- OECD countries at early intermediate stages of development. This positive systemic effect can be put into question by the recent negative shocks on Globalization and Freedoms related to the Covid-19 pandemic.

Suggested Citation

  • Jorge Braga de Macedo & Joaquim Oliveira Martins & João Tovar Jalles, 2021. "Globalization, Freedoms and Economic Convergence: An empirical exploration of a trivariate relationship using a large panel," Working Papers REM 2021/0189, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
  • Handle: RePEc:ise:remwps:wp01892021
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    More about this item

    Keywords

    globalization; democracy; freedoms; development; convergence; panel data; three-stage least squares;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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