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Lessons from the experience of OECD nations on macroeconomic growth and economic freedom, 2004–2008

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Abstract

This study empirically investigates the impact on per capita real economic growth of each of the ten measures of economic freedom computed annually by the Heritage Foundation. Within the context of the Random Effects Model, panel least squares estimations using a 5-year panel (2004 through 2008) dataset for the OECD nations as a group reveal that the percentage growth rate in the purchasing-power-parity adjusted per capita real GDP for OECD nations was, at the 5 % statistical significance level or better, an increasing function of at least seven of the ten economic freedom measures. The results underscore the critical role that economic freedom plays in a nation’s economic growth and prosperity and the importance of pursuing policies that are consistent with increasing economic freedom.

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Notes

  1. OECD membership grew by four nations to 34 in 2010.

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Authors and Affiliations

  1. Finance and Accounting Department, Davis College of Business, Jacksonville University, 2800 University Blvd. N., Jacksonville, FL, 32211, USA

    Richard J. Cebula

  2. University of Tennessee-Chattanooga, 615 McCallie Avenue, Chattanooga, TN, 37403-2598, USA

    J. R. Clark

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  1. Richard J. Cebula
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  2. J. R. Clark
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Correspondence to Richard J. Cebula.

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Cebula, R.J., Clark, J.R. Lessons from the experience of OECD nations on macroeconomic growth and economic freedom, 2004–2008. Int Rev Econ 59, 231–243 (2012). https://doi.org/10.1007/s12232-012-0162-0

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  • DOI: https://doi.org/10.1007/s12232-012-0162-0

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