scholarly journals THE IMPACT OF HUMAN FREEDOMS ON ECONOMIC GROWTH

2020 ◽  
Author(s):  
Elena Makrevska Disoska ◽  
Katerina Shapkova Kocevska
Keyword(s):  
Economic Growth ◽  
Human Rights ◽  
Growth Rates ◽  
Economic Freedom ◽  
Positive Impact ◽  
Ordinary Least Squares ◽  
New Institutional Economics ◽  
Human Freedom ◽  
The World ◽  
The Impact

The impact of formal institutions, including rule of law, human rights, and civil liberties on economic growth has been in the focus of the latest research agenda of the new institutional economics due to the current pandemic of the Corona-19 virus. Some limitations are necessary to be imposed to address a pandemic, but this is a real risk of lasting deterioration in basic human freedoms. Increased surveillance, restrictions on free expression and information, and limits on public participation are becoming increasingly common. The present fear is that the authorities worldwide are using the current situation to repress human rights for political purposes. This paper aims to explore the effect of the overall institutional environment, understood as the concept of human freedom, on economic prosperity in different jurisdictions around the world. Human freedom is a general term for personal, civil, and economic freedom and therefore the interconnection with economic growth can be seen in both directions. In our analysis, we use the Human Freedom Index published by the Fraser Institute as a proxy for human freedom. Here, human freedom is understood as the absence of coercive constraint. The index is calculated based on 79 distinct indicators representing different aspects of personal and economic freedom. This analysis seeks to answer several questions. First, we are interested in examining whether there is empirical evidence about the causality between human freedoms and economic growth. Second, we are interested in whether human freedom has a positive impact on growth rates. And third, we are interested in examining the influence of other determinants on economic growth. To test the causality between human freedom and economic growth, we have conducted a Granger causality analysis. The empirical strategy for identification of the possible influence of human freedom to growth rates includes the development of ordinary least squares (OLS) panel regression models for selected economies of the world, or around 174 cross-section units (countries) in the period between 2008 and 2017.

scholarly journals An Attempt to Assess the Quantitative Impact of Institutions on Economic Growth and Economic Development

2014 ◽  
Vol 38 (1) ◽  
pp. 7-30
Author(s):  
Mariusz Próchniak
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Empirical Analysis ◽  
Economic Freedom ◽  
Institutional Environment ◽  
Positive Impact ◽  
Policy Implications ◽  
Regression Equations ◽  
Solow Model ◽  
The Impact

Abstract This study aims at assessing to what extent institutional environment is responsible for worldwide differences in economic growth and economic development. To answer this question, we use an innovative approach based on a new concept of the institutions-augmented Solow model which is then estimated empirically using regression equations. The analysis covers 180 countries during the 1993-2012 period. The empirical analysis confirms a large positive impact of the quality of institutional environment on the level of economic development. The positive link has been evidenced for all five institutional indicators: two indices of economic freedom (Heritage Foundation and Fraser Institute), the governance indicator (World Bank), the democracy index (Freedom House), and the EBRD transition indicator for post-socialist countries. Differences in physical capital, human capital, and institutional environment explain about 70-75% of the worldwide differences in economic development. The institutions-augmented Solow model, however, performs slightly poorer in explaining differences in the rates of economic growth: only one institutional variable (index of economic freedom) has a statistically significant impact on economic growth. In terms of originality, this paper extends the theoretical analysis of the Solow model by including institutions, on the one hand, and shows a comprehensive empirical analysis of the impact of various institutional indicators on both the level of development and the pace of economic growth, on the other. The results bring important policy implications.

scholarly journals Impact of the government size on economic growth in the Western Balkan countries

2022 ◽  
Vol 11 (1) ◽  
pp. 55-63
Author(s):  
Roberta Bajrami ◽  
Adelina Gashi ◽  
Kosovare Ukshini ◽  
Donat Rexha
Keyword(s):  
Economic Growth ◽  
Government Spending ◽  
Economic Freedom ◽  
Ordinary Least Squares ◽  
Government Size ◽  
Gdp Growth ◽  
Government Consumption ◽  
Per Capita ◽  
The Government ◽  
The Impact

The Keynesian theory states that economic growth is positively affected by government spending, while Classical theory states that economic growth is negatively affected by government spending, as is stated by neoclassical public choice theorists (Nyasha & Odhiambo, 2019). Based on these theories, many authors have carried out research on the impact of economic freedom on economic growth by analyzing various empirical cases. Bergh and Karlsson (2010) with the findings from his paper confirmed that the countries with the highest government size have an elevated growth in the globalization index of KOF and the Fraser Institute’s economic freedom index. The main aim of this paper is to analyze the government size impact on the growth of the economy in the Western Balkan in the time period 2000–2017 according to Fraser Institute’s data, incorporating the following econometric models: fixed and random effects, pooled ordinary least squares (OLS), and Hausman-Taylor IV. With these models, this paper analyzes a government size and its components: government enterprises and investment, government consumption, transfers, and subsidies. The results illustrate a relationship between the size of the government and the growth of the economy in the Western Balkans that is positive. 1% increase in government size affects 0.29% gross domestic product (GDP) growth per capita. According to the Hausman-Taylor instrumental variable, 1% growth of government consumption is affected by 0.69% the decline in GDP per capita. The growth rate of transfers and subsidies affects 0.17% of GDP growth per capita and 1% of government enterprises and investment affects 0.54% GDP growth per capita.

Factors of Macroeconomic Dynamics in the Transition to the Information Economy

2019 ◽  
Vol 7 (1) ◽  
pp. 25-30
Author(s):  
Леонид Басовский ◽  
Leonid Basovskiy ◽  
Елена Басовская ◽  
Elena Basovskaya
Keyword(s):  
Economic Growth ◽  
Factor Analysis ◽  
Growth Rates ◽  
Positive Impact ◽  
Principal Component ◽  
Developed Countries ◽  
Entire Period ◽  
Annual Growth Rate ◽  
Negative Effect ◽  
The Impact

The study was made of the relationship between GDP growth rates and individual components of its final use by combining factor analysis using the principal component method and regression analysis. The period from 1955 to 1980 was studied using data on the average annual growth rate of components over fiveyear periods in the countries of the non-socialist world. The growth rates of the various components of the use of GDP at different stages as the fourth technical and economic structure of the fourth dominates and the development of crisis phenomena in the economy has had a variable impact on economic growth. During the crisis period, the impact of the growth of all components of using GDP on economic growth has dropped sharply. The greatest role in this period was played by the growth of current expenditures of the state. Comparison of the structure of the use of GDP using factor analysis by the method of principal components was carried out by the average annual values for the period from 1950 to 1980. As the development crisis approaches, as the models show, the influence of factors of the structure of using GDP on economic growth decreases. During the entire period, high levels of government spending had a negative effect on economic growth. The impact of exports and imports was positive for the entire period studied. Overcoming the crisis in the economies of developed countries led to a transition to a positive impact of investment on economic growth.

scholarly journals The Impacts of Monetary and Fiscal Policies on Economic Growth in Malaysia, Singapore and Thailand

2020 ◽  
Vol 9 (1) ◽  
pp. 114-130
Author(s):  
Chai-Thing Tan ◽  
Azali Mohamed ◽  
Muzafar Shah Habibullah ◽  
Lee Chin
Keyword(s):  
Economic Growth ◽  
Least Squares ◽  
Least Squares Method ◽  
Negative Impact ◽  
Positive Impact ◽  
Ordinary Least Squares ◽  
Jel Classification ◽  
Fiscal Policies ◽  
Distributed Lag ◽  
The Impact

This article analyses the impact of monetary and fiscal policies on economic growth in Malaysia, Singapore and Thailand from 1980:Q1 to 2017:Q1. Autoregressive distributed lag (ARDL) approach is employed to determine the long-run relationship. Further, a range of econometric models, such as fully modified least squares method (FMOLS), canonical cointegration regression (CCR) and dynamic ordinary least squares method (DOLS), are applied to check the robustness. The results are stable and robust as all the models yield consistency result. The main findings in this study demonstrate that: (a) interest rate had a negative impact on economic growth in three selected countries. (b) Government spending had a negative impact on economic growth in Malaysia and Singapore, but had a positive impact in Thailand. (c) Monetary policy is more effective in Malaysia and Singapore, while fiscal policy is more effective in Thailand. JEL Classification: E52, E58, E62, C01

scholarly journals Government Size and Economic Growth in Botswana: An Application of Nonlinear Armey Curve Analysis

2018 ◽  
Vol 5 (1) ◽  
Author(s):  
Narain Sinha ◽  
Kefilwe Allister Kalayakgosi
Keyword(s):  
Economic Growth ◽  
Polynomial Regression ◽  
Negative Impact ◽  
Positive Impact ◽  
Quadratic Function ◽  
Ordinary Least Squares ◽  
Series Data ◽  
Government Size ◽  
Government Revenue ◽  
The Impact

This study has investigated the impact of government size on economic growth in Botswana using annual time series data for the period 1973 to 2012. The study adopted a framework analysis based on a quadratic function/second degree polynomial regression employed by Herath (2012). Ordinary Least Squares (OLS) method was used for the regression analysis. The results obtained are not consistent with the empirical and theoretical views as small government size has a negative impact on economic growth while a large government size has a positive impact on economic growth. The results obtained in the study were opposite to the views of most of the studies conducted. Nominal Total government expenditure is used as a measure of government size and growth of nominal GDP is used to measure economic growth. The study also employed other control variables which affect growth like government revenue as a percentage of GDP, Gross capital formation (GCF) as a percentage of GDP as proxy for investment rate and growth of paid employees as a proxy for labor force growth. The results showed that government revenue and GCF had a negative impact on economic growth but GCF was insignificant. Growth of paid employees on the other hand had a positive impact on economic growth. The study aimed at investigating the existence of the Armey curve in a developing country like Botswana. Due to government size having a negative impact on economic growth and government size squared having a positive impact on economic growth the conclusion is that the Armey curve does not exist in Botswana.

The Effect of Democratization and Economic Freedom on Economic Growth

2020 ◽  
pp. 171-184
Author(s):  
Ibrahim Orkun Oral
Keyword(s):  
Economic Growth ◽  
Economic Freedom ◽  
Positive Relationship ◽  
Panel Data Analysis ◽  
Negative Relationship ◽  
Underdeveloped Countries ◽  
The World Bank ◽  
The World ◽  
The Impact ◽  
The Relationship

This chapter examines the impact of democratization and economic freedom on economic growth. For this purpose, according to the classification issued by the World Bank, three groups of countries, developed, developing, and underdeveloped, were included in the study. The impact of democratization and economic freedom on economic growth was tested by panel data analysis in the period of 1995-2012. As a result of the analysis, the relationship between democracy-economic freedom and economic growth has been different according to country groups. While there was a positive relationship between economic growth and democracy-economic freedom in developed and underdeveloped countries, a negative relationship was found in the developing country group.

The Problem of Factors that Determine the Economic Development of Modern Russia

2018 ◽  
pp. 37-41
Author(s):  
Елена Басовская ◽  
Elena Basovskaya ◽  
Леонид Басовский ◽  
Leonid Basovskiy
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Growth Rates ◽  
World Economy ◽  
Political Factors ◽  
The World ◽  
Before And After ◽  
Economic Growth Rates ◽  
The Impact ◽  
To Receive

In the economy of Russia after the crisis of 2008–2009 systemic changes were occurred. In the period before this crisis, Russia experienced economic growth, which was faster than the growth rate of the world economy, then after the crisis, economic growth rates do not exceed the growth rates of the world economy. To identify the reasons and factors for changing the model of economic development of the country, a project for researching the economy before and after the crisis of 2008–2009 is proposed. It is proposed to receive quantitative assessments of the impact of economic, socio-economic, political factors and other significant factors that determine productivity, differing by region of the country, by building econometric models of productivity in the form of expanded production functions.

Political instability and its impact on economic growth: the case of Jordan

2019 ◽  
Vol 18 (3) ◽  
pp. 366-380 ◽  
Author(s):  
Malak Samih Abu Murad ◽  
Nooh Alshyab
Keyword(s):  
Economic Growth ◽  
Design Methodology ◽  
Negative Impact ◽  
Positive Impact ◽  
Political Instability ◽  
Ordinary Least Squares ◽  
Small Country ◽  
Content Type ◽  
The Impact ◽  
Least Squares Approach

Purpose Political instability may have far-reaching implications for economic performance. This paper aims to analyze the impact of political instability on economic growth by focusing on the case of Jordan, a small country located in the Middle East, which represents a highly political instable region. Design/methodology/approach The analysis is performed by regressing different indicators for internal and external political instability on economic growth for the period from 1980 to 2015 using the fully modified ordinary least squares approach. Findings The results point at a significant impact of political instability on the economic growth of the country in all the specifications considered; in particular, the analysis reveals a positive impact of external political instability indexed by border countries’ political instability and a negative impact of internal political instability, as proxied by the number of crimes and cabinet changes. Further, regarding the effect of the level of freedom, the authors find evidence for the so-called conflict perspective. Originality/value This paper is original and relevant for two main reasons. First, it adds to the debate on the effects of political instability on economic growth, and hereby, disentangles the effects of internal and external political instability. Second, it makes an important contribution by focusing on the case of Jordan, which has received little attention in the literature on political instability so far, even though political instability is a constant threat to the country.

scholarly journals Impact of Exchange Rate on Economic Growth of Bangladesh

2021 ◽  
Vol 6 (3) ◽  
pp. 173-175
Author(s):  
Md. Fazlul Huq Khan
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Direct Investment ◽  
Least Squares Method ◽  
Positive Impact ◽  
Ordinary Least Squares ◽  
Nominal Exchange Rate ◽  
Series Data ◽  
The Impact

This paper investigates the impact of inflation, nominal exchange rate, foreign direct investment, and unexpected event shock on the economic growth of Bangladesh by using the time series data from 1990 through 2020. Augmented Dickey-Fuller and Phillips-Perron Unit Root Test used to identify unit-roots existence and check the stationary of variables. The Ordinary Least Squares method is applied to determine the relationship between the dependent variable and independent variables. The results revealed that the exchange rate and foreign direct investment have significantly affected the country's economic growth. Inflation, FDI, and exchange rate positive impact, whereas unexpected events like Covid-19, natural disasters, etc., negatively affect the economic development of Bangladesh. The study can be helpful for the policy makers to identify, formulate and implement the effect policies for the economic growth of the country.

scholarly journals Can Highway Networks Promote Productivity? Evidence from China

2021 ◽  
Vol 2021 ◽  
pp. 1-20
Author(s):  
Yumei Lin ◽  
Junpei Huang
Keyword(s):  
Economic Growth ◽  
Gravity Model ◽  
Matrix Method ◽  
Negative Impact ◽  
Positive Impact ◽  
Highway Construction ◽  
Market Potential ◽  
Highway Networks ◽  
The World ◽  
The Impact

The total mileage of highways in China ranks first in the world and constitutes an important symbol of China’s modernization. Economists, however, continue to debate whether highways always promote economic growth in every region and how to assess the impact. In this paper, we first use the OD-MATRIX method to calculate the shortest highway traveling time among 332 prefecture-level cities in China from 2000 to 2013. It is shown that the reduction of traveling time brought by highway construction significantly improves enterprise productivity. Second, to further explore the mechanism at work, we apply market potential approach to examine its effect on productivity. It is found that on average, the enhanced market potential induced by highway construction in China positively affect enterprise productivity. Finally, we calculate urban centrality via the space gravity model and conduct a sample regression according to the rank of urban centrality. Interestingly, we find that the impact of highways on productivity varies depending on cities’ degree of urban centrality. Highways have a positive impact in high-centrality cities but a negative impact in low-centrality cities. This correlation can be explained, in turn, by factors that include labor and capital flow from low-centrality cities to high-centrality cities.

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