Economic Freedom, Inflation Rate and their Impact on Economic Growth: A Panel Data Analysis

Cuneyt Kiliç () and Feyza Arica
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Cuneyt Kiliç: Canakkale Onsekiz Mart University, Biga Faculty of Economics and Administrative Sciences, Economics Department, Canakkale/Turkey
Feyza Arica: Canakkale Onsekiz Mart University, Biga Faculty of Economics and Administrative Sciences, Economics Department, Canakkale/Turkey feyzarica@gmail.comAuthor-Email:

Journal for Economic Forecasting, 2014, issue 1, 160-176

Abstract: The relationship between economic freedom and economic growth has always been discussed and investigated in the economic literature. This study investigates both the relationship among economic freedom, inflation rate, economic growth and, separately, economic freedom indices, inflation rate and economic growth in 23 uppermiddle income countries during 1995-2010. Pooled Least Squares and Two-way Panel Least Squares methods are used to estimate two different models. According to the results of these tests, economic freedom has a significantly positive effect, while inflation rate has a significantly negative effect on economic growth. When the components of economic freedom are examined separately, it was found that the coefficient of some components of economic freedom, such as government size index and business freedom index, were not significant variables. All other components of economic freedom are significantly related to economic growth.

Keywords: panel data analysis; inflation; economic freedom; economic growth (search for similar items in EconPapers)
JEL-codes: C33 E31 O10 O40 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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