ECONOMIC FREEDOM AND ECONOMIC GROWTH IN MENA COUNTRIES
Journal Title: Asian Economic and Financial Review - Year 2014, Vol 4, Issue 1
Abstract
Most studies of the relationship between economic freedom and growth of GDP have found a positive correlation. One problem in this area is the choice of measure of economic freedom. A single measurement does not reflect the complex economic environment and a highly aggregated index makes it difficult to draw policy conclusions. This paper attempts to answer the question: How does economic freedom impact economic growth? Using data from 13 selected MENA countries over the period of 2000 to 2009, this paper investigates the relationship between economic freedom and economic growth. The results of panel data analysis show that economic institutions, specifically economic freedom, play a significant role in economic development independently and the overall index of economic freedom is positively correlated with growth. It is found that economic freedom does matter for growth. This does not mean that increasing economic freedom, defined in general terms, is good for economic growth since some of the categories in the index are insignificant and some of the significant variables have negative effects.
Authors and Affiliations
Hossein Panahi| Assistant Professor, Department of Economics, University of Tabriz, Iran, Ahmad Assadzadeh| Assistant Professor, Department of Economics, University of Tabriz, Iran, Ramiar Refaei| Lecturer in Economics, University of Payame Noor, Baneh, Iran
Keywords
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