EconPapers    
Economics at your fingertips  
 

Revisiting the Invisible Hand Hypothesis: A Comparative Study between Bulgaria and Germany

Aleksandar Vasilev and Nadezhda Gesheva

EconStor Open Access Articles and Book Chapters, 2017, vol. 8, issue 1, 45-77

Abstract: This paper examines Adam Smith’s concept of an Invisible Hand of the market in light of the underlying assumptions for the theory to hold. Furthermore, the study focuses on Total Factor Productivity as a measure of efficiency of resource allocation, employs growth accounting in Bulgaria relative to a frontier country (Germany), and tries to explain the Total Factor Productivity gap with the difference in the quality of institutions and economic freedom performance (where the latter is based on the Freedom Index Indicators). Satisfactory results have been obtained, favoring the hypothesis that freer markets perform better and a “catching up” effect of Bulgaria’s Total Factor Productivity levels towards those of Germany has been observed. Finally, the study provides policy recommendations facilitating the Invisible Hand Process in Bulgaria for a more rapid convergence towards Germany’s productivity levels.

Keywords: invisible hand; total factor productivity (search for similar items in EconPapers)
JEL-codes: C32 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/161620/1/EJES_Vasilev_accepted.pdf (application/pdf)

Related works:
Journal Article: Revisiting the ‘invisible hand’ hypothesis: a comparative study between Bulgaria and Germany (2017) Downloads
Working Paper: Revisiting the Invisible Hand Hypothesis: A Comparative Study between Bulgaria and Germany (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:espost:161620

Access Statistics for this article

More articles in EconStor Open Access Articles and Book Chapters from ZBW - Leibniz Information Centre for Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().

 
Page updated 2025-03-22
Handle: RePEc:zbw:espost:161620