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Deregulation, economic growth and growth acceleration

  • Stankov, Petar

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.

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File URL: https://mpra.ub.uni-muenchen.de/26485/1/MPRA_paper_26485.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 26485.

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Date of creation: Oct 2010
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Handle: RePEc:pra:mprapa:26485
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  5. Marco Leonardi & Giovanni Pica, 2010. "Who Pays for it? The Heterogeneous Wage Effects of Employment Protection Legislation," CSEF Working Papers 265, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 13 May 2012.
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  8. Anita Wölfl & Isabelle Wanner & Tomasz Koźluk & Giuseppe Nicoletti, 2009. "Ten Years of Product Market Reform in OECD Countries: Insights from a Revised PMR Indicator," OECD Economics Department Working Papers 695, OECD Publishing.
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  10. Charles W. Calomiris, 2009. "Banking Crises and the Rules of the Game," Working Papers 2009/14, Czech National Bank, Research Department.
  11. Takeo Hoshi & Anil Kashyap, 1999. "The Japanese Banking Crisis: Where Did It Come From and How Will It End?," NBER Working Papers 7250, National Bureau of Economic Research, Inc.
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  13. Dani Rodrik, 2008. "Second-Best Institutions," American Economic Review, American Economic Association, vol. 98(2), pages 100-104, May.
  14. Stiroh, Kevin J & Strahan, Philip E, 2003. " Competitive Dynamics of Deregulation: Evidence from U.S. Banking," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 35(5), pages 801-28, October.
  15. Levine, Ross, 2005. "Finance and Growth: Theory and Evidence," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-934 Elsevier.
  16. Simon Johnson & William Larson & Chris Papageorgiou & Arvind Subramanian, 2009. "Is Newer Better? Penn World Table Revisions and Their Impact on Growth Estimates," Working Papers 191, Center for Global Development.
  17. Eric Tymoigne, 2009. "Securitization, Deregulation, Economic Stability, and Financial Crisis, Part I--The Evolution of Securitization," Economics Working Paper Archive wp_573_1, Levy Economics Institute.
  18. Richard B. Freeman, 2008. "Labor market institutions around the world," LSE Research Online Documents on Economics 19647, London School of Economics and Political Science, LSE Library.
  19. Acharya, Viral V & Baghai, Ramin & Subramanian, Krishnamurthy, 2009. "Labor Laws and Innovation," CEPR Discussion Papers 7171, C.E.P.R. Discussion Papers.
  20. Beck, T.H.L. & Laeven, L., 2006. "Institution building and growth in transition economies," Other publications TiSEM b872919e-8dac-46d6-9c0a-6, Tilburg University, School of Economics and Management.
  21. Tito Boeri & Pietro Garibaldi, 2007. "Two Tier Reforms of Employment Protection: a Honeymoon Effect?," Economic Journal, Royal Economic Society, vol. 117(521), pages 357-385, 06.
  22. Joshua L. Rosenbloom & William A. Sundstrom, 2009. "Labor-Market Regimes in U.S. Economic History," NBER Working Papers 15055, National Bureau of Economic Research, Inc.
  23. W. Bentley MacLeod & Voraprapa Nakavachara, 2007. "Can Wrongful Discharge Law Enhance Employment?," Economic Journal, Royal Economic Society, vol. 117(521), pages 218-278, 06.
  24. Bassanini, Andrea & Nunziata, Luca & Venn, Danielle, 2008. "Job Protection Legislation and Productivity Growth in OECD Countries," IZA Discussion Papers 3555, Institute for the Study of Labor (IZA).
  25. Juan Botero & Simeon Djankov & Rafael LaPorta & Florencio López-de-Silanes & Andrei Shleifer, . "The Regulation of Labor," Working Paper 19483, Harvard University OpenScholar.
  26. Antonio Estache & L. Wren-Lewis, 2009. "Towards a Theory of Regulation for Developing Countries: Following Jean-Jacques Laffont's Lead," ULB Institutional Repository 2013/43903, ULB -- Universite Libre de Bruxelles.
  27. Levon Barseghyan, 2008. "Entry costs and cross-country differences in productivity and output," Journal of Economic Growth, Springer, vol. 13(2), pages 145-167, June.
  28. Michael Alexeev & Robert Conrad, 2009. "The Elusive Curse of Oil," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 586-598, August.
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