The Impact of Economic Freedom on the Economic Growth in EU Countries

Abstract

This paper aims to examine the relationship between economic growth and economic freedom in the member states of the European Union (EU) from 2005 to 2020. By employing various statistical approaches, including The Ordinary Least Squares, Random Effect Model, and Fixed Effect Model, we analyze the data to estimate the overall and individual effects of economic freedom on economic growth. The present study concludes that the economic freedom has an impact on the economic growth phenomena and that the freedom economic liberalization contributes to a much better economic wellbeing of the population and determines an increasing tendency of the economy. After we independently evaluated different sub-indicators of economic freedom, we have discovered that the values of the majority of the economic freedom indicators have a significant contribution.

Keywords

• economic freedom
• economic growth
• panel data