Economic freedom influences economic growth and unemployment: an analysis of the Eurozone

Lack of economic growth and a high unemployment rate imply poverty and inequality. Economic freedom is considered a relevant explanatory factor for growth, employment and the distribution of income. The present research work addresses how policy makers should take into account economic freedom aspec...

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Bibliographic Details
Published in:Economic research - Ekonomska istraživanja 2023, Vol.36 (2)
Main Authors: Cervelló-Royo, Roberto, Devece, Carlos, Blanco-González Tejero, Cristina
Format: Article
Language:English
Subjects:
Business
Comparative analysis
Economic freedom
Economic growth
Economic inequality
Economic theory
Employment
Eurozone
Freedoms
Fuzzy sets
fuzzy-set qualitative comparative analysis
fuzzyset qualitative comparative analysis
G00
F00
E00
M00
GDP
Government
Gross Domestic Product
Income distribution
International comparisons
Labor
Morality
Policy making
Poverty
Unemployment
unemployment rate
Work
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Summary:Lack of economic growth and a high unemployment rate imply poverty and inequality. Economic freedom is considered a relevant explanatory factor for growth, employment and the distribution of income. The present research work addresses how policy makers should take into account economic freedom aspects to effectively enhance a country's economic growth and lower its unemployment rate. This study analyses the effect of four components of economic freedom (business freedom, labour freedom, government integrity, tax burden) on the mean GDP growth of the last 5 years, and also on unemployment. A cross-national analysis, based on data from the 23 Eurozone3 (Eurozone and part of its enlargement) Member Countries, examines the causal configurations of GDP and unemployment by a fuzzy-set qualitative comparative analysis. The results suggest that the combination of high levels of business freedom, labour freedom and government integrity triggers high levels of economic growth and lowers the unemployment rate.
ISSN:1331-677X
1848-9664
DOI:10.1080/1331677X.2023.2175007