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The Path of Liberalization and Economic Growth

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  • Hans Pitlik
Abstract
Empirical research has shown that both more economic freedom and a higher stability of policy variables are supportive for economic growth. Thus, the path of policy liberalization may have a considerable influence on a nation’s growth performance. Using the Fraser‐index of economic freedom, this article shows empirically that policy volatility proves to be growth depressing, even if the state liberalizes the economy in the long‐run. Growth is significantly higher if liberalization occurs on a smoother path.

Suggested Citation

  • Hans Pitlik, 2002. "The Path of Liberalization and Economic Growth," Kyklos, Wiley Blackwell, vol. 55(1), pages 57-80.
    • Handle: RePEc:bla:kyklos:v:55:y:2002:i:1:p:57-80
    DOI: 10.1111/1467-6435.00177
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