Economic Freedom and Economic Performance in Latin America: A Panel Data Analysis |
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Authors: | Constantine Alexandrakis Grigorios Livanis |
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Institution: | 1. Department of Economics, 104 Hofstra University, , Hempstead, NY, 11549 USA;2. 617‐373‐4801Fax: 617‐373‐8628;3. International Business & Strategy Group, College of Business Administration, 319 Hayden Hall, Northeastern University, , Boston, MA, 02115 USA |
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Abstract: | This paper performs panel regressions of output per worker, capital intensity, human capital, and total factor productivity in Latin America on measures of economic freedom in five policy areas. Results show that a smaller government raises output per worker in Latin America but not in the OECD. Stronger property rights and a tighter monetary policy also raise output per worker, but greater freedom to trade internationally does not, despite doing so in the OECD. Deregulation lowers output per worker in both Latin America and the OECD. Finally, a tighter monetary policy raises total factor productivity (TFP) but reduces capital intensity in Latin America, while deregulation raises capital intensity but lowers TFP in both sets of countries. |
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