The Nexus between Improvements in Economic Freedom and Growth: Evidence from CEE Countries in Transition

Henryk Gurgul and Łukasz Lach

MPRA Paper from University Library of Munich, Germany

Abstract: This study examines the causal links between improvements in economic freedom and changes in GDP per capita of new EU members in transition in the period 2000-2009. The empirical results suggest significant causality running from changes in monetary and fiscal freedom, trade openness, regulation of credit, labour, and business, legal structure and security of property rights, and access to sound money to movements in GDP per capita, especially in less and moderately developed CEE transition countries. Moreover, we find evidence that improvements in economic freedom are one of the main factors stimulating the convergence of these economies towards rich EU members. The evidence of causality in the opposite direction is much weaker.

Keywords: economic growth; economic freedom; CEE transition economies. (search for similar items in EconPapers)
JEL-codes: K0 O10 O40 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (4)

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Journal Article: The Nexus between Improvements in Economic Freedom and Growth: Evidence from CEE Countries in Transition (2011)
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