Economic Growth, Economic Freedom, and Governance

This exploratory study examines the impact of various forms of economic freedom and various dimensions of governance, as well as a number of economic factors, on economic growth among OECD nations. Empirical estimation finds that the natural log of per capita purchasing-power-parity adjusted real GDP in OECD nations is positively impacted by business freedom, monetary freedom, trade freedom, and property rights security. Economic growth is found to be negatively affected by perceived government corruption while being positively impacted by both control of corruption and political stability. Other findings indicate that higher unemployment rates and higher long term nominal interest rates inhibit economic growth, while net export growth enhances economic growth.