Does free trade really reduce growth? Further testing using the economic freedom index

Berggren, Niclas; Jordahl, Henrik

doi:10.1007/s11127-005-3994-2

Cited by 99 publications

(48 citation statements)

References 15 publications

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“…Their practical conclusion thus is that not all types of freedom are eventually good for growth. In a third study, Berggren and Jordahl (2005) produce similar results with the year 2002 version of the EFW Index, but show that these are neither robust to more refined change in model specification, nor to a reduction of the sample. Their tests only leave them with Legal Structure and Property Rights exercising a positive and significant influence on growth rates.…”

Section: The Concept and Construction Of The Efw Indexmentioning

confidence: 87%

Economic freedom and growth. Which policies matter the most?

Rode

Coll

2011

Const Polit Econ

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Empirical studies provide evidence that economic freedom, as measured by the Economic Freedom of the World Index, is related to economic growth. None the less, identifying which aspects of economic freedom are more conducive to growth has proven difficult, due to multicollinearity among the index areas. A possible explanation is that certain countries score high in all areas, whereas others tend do bad in all of them, simply because the former are more freedom-friendly than the latter. However, it is also true that each country presents a combination of freedoms, and restrictions to freedom, at the level of the individual indicators that make up each area. If some regularity exists with respect to these combinations, empirical detection of the most popular policy combinations would alleviate the collinearity problem, when assessing growth effects. Our article explores this possibility by means of cluster analysis, which we conduct at the individual indicator level. We show that multicollinearity can indeed be reduced in this way and identify policy packages that seem to be more conducive to economic growth than others. Results further indicate that certain policy packages may have only a short-term effect on growth, whereas others seem to have an enduring one.

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Section: The Concept and Construction Of The Efw Indexmentioning

confidence: 87%

Economic freedom and growth. Which policies matter the most?

Rode

Coll

2011

Const Polit Econ

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“…In the literature, researchers have usually focused on only one of the five dimensions of economic freedom or on the aggregate index (Berggren and Jordahl 2005;Norberg 2002;Jäntti and Jenkins 2010;Berggren 1999;Gwartney et al 2004). This is also the case with Hall and Lawson (2014), who made an overview of empirical studies using the Economic Freedom Index of Fraser Institute.…”

Section: Economic Freedom and Income Inequalitymentioning

confidence: 99%

Economic Freedom, Income Inequality and Life Satisfaction in OECD Countries

Graafland

Lous

2017

J Happiness Stud

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Since Piketty's Capital in the 21st Century in 2014, scientific interest into the impact of income inequality on society has been on the rise. However, little is known about the mediating role of income inequality in the relationship between market institutions and subjective well-being. Using panel analysis on a sample of 21 OECD countries to test the effects of five different types of economic freedom on income inequality, we find that fiscal freedom, free trade and freedom from government regulation increase income inequality, whereas sound money decreases income inequality. Income inequality is found to have a negative effect on life satisfaction. Mediation tests show that income inequality mediates the influence of fiscal freedom, free trade and freedom from government regulation on life satisfaction.

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“…OLS, fixed effects and random effects models were used for the analysis in order to both provide comparable results, and adjust for unobserved heterogeneity. In most models, no association was found between measures of economic globalisation (the recently developed Konjunktur-Forschungsstelle Index of Globalisation (KOF), economic domain (KOF1) (Swiss Institute of Technology, 2014), and the Economic Freedom of the World index (EFI) Freedom to Trade Internationally (EFI4) (Berggren & Jordahl, 2005;Gwartney et al, 2008;Miles et al, 2006)) and TB incidence. However, one model adjusting for time trends provided evidence that an increase of 1 point in the EFI4 was associated with a 10.4% drop in TB incidence.…”

Section: Selected Country Panel Analyses (Group 2)mentioning

confidence: 99%

The relationship between international trade and non-nutritional health outcomes: A systematic review of quantitative studies

Burns

Jones

Suhrcke

2016

Social Science & Medicine

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Markets throughout the world have been reducing barriers to international trade and investment in recent years. The resulting increases in levels of international trade and investment have subsequently generated research interest into the potential population health impact. We present a systematic review of quantitative studies investigating the relationship between international trade, foreign direct investment and non-nutritional health outcomes. Articles were systematically collected from the SCOPUS, PubMed, EconLit and Web of Science databases. Due to the heterogeneous nature of the evidence considered, the 16 included articles were subdivided into individual level data analyses, selected country analyses and international panel analyses. Articles were then quality assessed using a tool developed as part of the project. Nine of the studies were assessed to be high quality, six as medium quality, and one as low quality. The evidence from the quantitative literature suggests that overall, there appears to be a beneficial association between international trade and population health. There was also evidence of the importance of foreign direct investment, yet a lack of research considering the direction of causality. Taken together, quantitative research into the relationship between trade and non-nutritional health indicates trade to be beneficial, yet this body of research is still in its infancy. Future quantitative studies based on this foundation will provide a stronger basis on which to inform relevant national and international institutions about the health consequences of trade policies.

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Does free trade really reduce growth? Further testing using the economic freedom index

Cited by 99 publications

References 15 publications

Economic freedom and growth. Which policies matter the most?

Economic freedom and growth. Which policies matter the most?

Economic Freedom, Income Inequality and Life Satisfaction in OECD Countries

The relationship between international trade and non-nutritional health outcomes: A systematic review of quantitative studies

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