Abstract
Since1980s economic freedom policies have been popular in most countries, especially in developing countries. There are many studies regarding relationship between economic freedom and other socio-economic variables, but few dealt directly with the impact of economic freedom on inflation. This study analyses the effect of economic freedom on inflation in MENA region during 1996- 2006 using panel data regression analysis on the basis of the so- called Gordon theory. Our findings indicate that although the impact of economic freedom on inflationis not considerable butit is statistically significance.
Highlights
The economic freedom is a state in which there is no imposition for ranking the requirements and allocating the production equipment to economic units
In this paper, we investigate the effect of economic freedom on inflation in MENA region
The purpose of this study has been examining the effects of economic freedom on inflation.To do so, Gordon's adjusted triangular inflation function was considered as a theoretical base.Accounting method was using panel data about seventeen countries in the Middle East and North Africa between1996 to2006
Summary
The economic freedom is a state in which there is no imposition for ranking the requirements and allocating the production equipment to economic units. It is widely believed that it has a lot of benefits and can provide suitable methods for economic state men's decision making in different countries. It is very notable for the economists to measure the economic freedom of a country. After the numerous studies (which were administered by economists) two indexes were defined for economic freedom degree by Fraser Institute and Heritage Foundation. These indexes are different in the range of the extreme number and counting methods, but they include similar field. Heritage's sub index areas include: trading freedom, business freedom, financial freedom, government's intervention in economy, monetary freedom, investment freedom, fiscal freedom, property rights, freedom from corruption and labor freedom
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