Évf. 9 szám 1 (2010)
Tanulmányok

Economic Freedom and the Process of Economic Growth: An Empirical Analysis Based on a New Measure

Megjelent június 14, 2010
Judit Kapas
Debreceni Egyetem Közgazdaság- és Gazdaságtudományi kar
Pal Czegledi
Debreceni Egyetem Közgazdaság- és Gazdaságtudományi kar
PDF (English)

APA

Kapás, J., & Czeglédi, P. (2010). Economic Freedom and the Process of Economic Growth: An Empirical Analysis Based on a New Measure. Competitio, 9(1), 5-30. https://doi.org/10.21845/comp/2010/1/1

This paper, relying on a conceptualization of economic freedom in terms of kinds of government actions, develops a new measure of economic freedom. However, this is not art for art’s sake; instead, it allows us to provide an explanation for how particular institutions of economic freedom enhance economic development, a view upon which scholars agree. We develop two concepts related to economic freedom, namely the freedom-compatible and freedom-non-compatible institutions and use them as tools in an analysis of the process of economic growth, especially the relationship between economic freedom and long-run income. The major argument is that freedom-compatible institutions are primary determinants of income, while freedom-non-compatible institutions depend upon them and are partly the outcomes of the growth process itself, a fact which is explained by the Misesian theory of interventionism. Our regression analyses support our theoretical insights.

JEL Classification: B53, H10, O10

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