The Impact of Economic Freedom on Economic Growth? New European Dynamic Panel Evidence

Ivana Brkić, Nikola Gradojevic and Svetlana Ignjatijević
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Ivana Brkić: Faculty of Economics and Engineering Management in Novi Sad, University Business Academy in Novi Sad, 21000 Novi Sad, Serbia
Svetlana Ignjatijević: Faculty of Economics and Engineering Management in Novi Sad, University Business Academy in Novi Sad, 21000 Novi Sad, Serbia

JRFM, 2020, vol. 13, issue 2, 1-13

Abstract: This paper analyzes the impact of economic freedom along with traditional economic factors on economic growth for a panel of European countries. The growth of the gross domestic product was observed over a twenty-year time period on a sample of 43 developing and developed countries. Based on a robust dynamic panel setting, we conclude that increases in economic freedom as expressed by the Index of Economic Freedom/Heritage Foundation (but not its levels) are related to economic growth. The EU membership status either had no effect or it curbed the effect of the economic freedom on growth. We also find that the subprime economic crisis of 2008–2009 exerted a negative impact on the growth of European economies.

Keywords: economic freedom; economic growth; Europe; panel analysis; subprime crisis; system GMM (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (11)

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