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Deregulation, economic growth and growth acceleration

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  • Stankov, Petar

Abstract

The paper analyzes the influence of credit-, labor-, and product market deregulation policies on economic growth in more than 70 economies over a period of 30 years. It addresses both the issues of reform measurement and its endogeneity. Specifically, by combining a difference-in-difference strategy with an IV approach to the endogeneity of the reform timing, this work finds that deregulation contributed to the per capita GDP levels of the early reformers relatively more than to the ones of the late reformers. However, the paper also finds that accelerating credit market reforms leads to a large growth acceleration effect for the late reformers, which points to large dynamic welfare gains from deregulation. The latter result suggests that a large-scale credit market re-regulation in the aftermath of the Great Recession is a misguided approach to deal with the consequences of the financial crisis.

Suggested Citation

  • Stankov, Petar, 2010. "Deregulation, economic growth and growth acceleration," MPRA Paper 26485, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:26485
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    References listed on IDEAS

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    Cited by:

    1. Petar Stankov, 2013. "Crises, Reforms and Growth: A Non-Technical Summary of Recent Empirical Work," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 4, pages 55-61, December.

    More about this item

    Keywords

    Deregulation; economic growth; growth acceleration; origins of institutional change;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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