2016

Economic Freedom and Economic Crises

Reprint No. 2016:59

Author(s): Christian BjørnskovYear: 2016 Title: European Journal of Political Economy Volume (No.): 45 (December) Pages: 11–23
Preliminary version

Economic Freedom and Economic Crises Christian Bjørnskov


In this paper, I explore the politically contested association between the degree of capitalism, captured by measures of economic freedom, and the risk and characteristics of economic crises. After offering some brief theoretical considerations, I estimate the effects of economic freedom on crisis risk in the post-Cold War period 1993–2010. I further estimate the effects on the duration, peak-to-trough GDP ratios and recovery times of 212 crises across 175 countries within this period. Estimates suggest that economic freedom is robustly associated with smaller peak-to-trough ratios and shorter recovery time. These effects are driven by regulatory components of the economic freedom index.


Reference:
Bjørnskov, Christian (2016), "Economic Freedom and Economic Crises". European Journal of Political Economy 45(December), 11–23.

Christian Bjørnskov

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Ph: +45 87 16 48 19
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Interdisciplinary European Studies

The European Union and the Return of the Nation State

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This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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