Cohen, Joseph N (2011): Neoliberalism’s relationship with economic growth in the developing world: Was it the power of the market or the resolution of financial crisis?
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Between 1995 and 2007, the world’s economies embraced neoliberal reforms and prospered, a coincidence that is often taken as proof that liberal economies grow faster. A large body of econometric research shows that “freer” economies are more prosperous. I levy two methodological criticisms at this literature that ultimately render a very different picture of pro-market reforms’ relationship with growth. My analysis suggests that neoliberal reforms did not significantly affect growth where they did not ease public financing or encourage foreign investment. The evidence does not suggest that the economic prosperity of the past 20 years is due to economic liberalism per se, but rather the developing world enjoying stabilized macrofinancial systems and a global investment boom. Neoliberal reforms may have helped produce this stability and investment, but systemic financial stabilization was only one of several goals that they pursued. A sober interpretation of the data finds little evidence for believing that economies will prosper as they embrace laissez-faire ideals.
|Item Type:||MPRA Paper|
|Original Title:||Neoliberalism’s relationship with economic growth in the developing world: Was it the power of the market or the resolution of financial crisis?|
|Keywords:||economic freedom; neoliberalism; laissez faire; periodicity; economic growth; economic development; capitalism|
|Subjects:||P - Economic Systems > P1 - Capitalist Systems > P11 - Planning, Coordination, and Reform
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity
E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination
O - Economic Development, Technological Change, and Growth > O2 - Development Planning and Policy > O21 - Planning Models; Planning Policy
|Depositing User:||Joseph N. Cohen|
|Date Deposited:||21. Feb 2011 18:13|
|Last Modified:||13. Feb 2013 06:38|
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Neoliberalism’s relationship with economic growth in the developing world: Was it the power of the market or the resolution of financial crisis? (deposited 28. Aug 2010 17:05)
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