Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/109116
Authors: 
Bjørnskov, Christian
Year of Publication: 
2015
Series/Report no.: 
IFN Working Paper 1056
Abstract: 
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 crisis. 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.
Subjects: 
Crisis
Economic freedom
Institutions
JEL: 
O11
O43
P16
Document Type: 
Working Paper

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