Does economic freedom cause prosperity? An IV approach

Autor:	Hugo M. Montesinos, Hugo J. Faria
Rok vydání:	2009
Předmět:	Macroeconomics Economics and Econometrics Index (economics) Sociology and Political Science media_common.quotation_subject Instrumental variable Economic Freedom of the World Causality Economic freedom Economics Income level Prosperity media_common Public finance
Zdroj:	Public Choice. 141:103-127
ISSN:	1573-7101 0048-5829
DOI:	10.1007/s11127-009-9440-0
Popis:	A positive, statistical and economic significant relation between growth, income level and the Economic Freedom of the World (EFW) index has been amply documented. Most analyses, however, use OLS methods which, in the presence of endogenous variables do not establish causality and produce biased and inconsistent estimates. This paper uncovers the exogenous component of EFW using IV methods and finds a robust channel from economic freedom to prosperity. The findings, including instrument validity tests, support the importance of policies and institutions for development and warrants policy advice aimed at increasing economic freedom to foster prosperity.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::5b95d5a900985ba006faf3b0bfdde34b https://doi.org/10.1007/s11127-009-9440-0 Zobrazit plný text záznamu Plný text ve formátu PDF