Causality in the freedom – growth relationship

  title={Causality in the freedom – growth relationship},
  author={John W. Dawson},
This paper addresses the issue of causality in the relationship between various types of institutions—namely, political and economic freedom—and long-run economic growth. It is shown that existing empirical studies of these relationships provide evidence of correlation, but not causation. Granger causality tests of freedom vs. growth, and freedom vs. investment are conducted using aggregate measures of freedom as well as underlying components of freedom when available. The results suggest which… CONTINUE READING
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