Panel evidence on economic freedom and growth in the United States

Using the measures of economic freedom developed by Karabegovic et al. (2003), we are able to create a dataset spanning the period 1981 to 2004 in order to investigate the nature of the relationship between economic freedom and economic growth for the fifty US states. Overall, we find a significant positive relationship between economic freedom and economic growth. However, not all components of economic freedom affect growth equally.

Research Highlights► Paper examines relationship between economic freedom and growth in the United States. ► Economic freedom is generally associated with higher economic growth. ► Not all components of freedom affect growth similarly.