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Economic Freedom and The Business Cycle: The Egyptian Experience

  • Ossama Mikhail

Most studies that emphasize and encourage the shift towards a less regulated and financially open system rest on the premise of a prosperous growth prospect. Accordingly, interests have focused on growth models as a framework to understand and to analyze the effects of economic freedom. In this paper, we investigate the short-run characteristics of economic freedom. Using a stochastic general equilibrium framework, we argue that economic reforms tend to ease periods of recessions, increase welfare, and alleviate the burden of unemployment. Calibrated to the Egyptian economy, we simulate our model and investigate the [robust] relationship between economic reforms and the business cycle.

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Paper provided by EconWPA in its series Macroeconomics with number 0402002.

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Length: 37 pages
Date of creation: 02 Feb 2004
Date of revision:
Handle: RePEc:wpa:wuwpma:0402002
Note: Type of Document - pdf; prepared on Win98; pages: 37; figures: 8
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