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Aggregate demand shortfalls and economic freedom

Author

Listed:
  • Ryan H. Murphy

    (Southern Methodist University
    SMU Cox School of Business)

  • Taylor Leland Smith

    (Texas Tech University)

Abstract

Political instability is often exacerbated in periods of aggregate demand shortfall. It has been conjectured that inadequate policy responses to recessions may be inimical to free economic institutions. This paper uses the Economic Freedom of the World index as its measure of economic institutions, and finds that the change in economic freedom in the following five, ten, and fifteen years is negatively impacted by an aggregate demand shortfall as measured by negative NGDP growth.

Suggested Citation

  • Ryan H. Murphy & Taylor Leland Smith, 2018. "Aggregate demand shortfalls and economic freedom," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 31(1), pages 111-122, March.
    • Handle: RePEc:kap:revaec:v:31:y:2018:i:1:d:10.1007_s11138-017-0377-0
    DOI: 10.1007/s11138-017-0377-0
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    References listed on IDEAS

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    Cited by:

    1. James E. Payne & James W. Saunoris & Saban Nazlioglu & Cagin Karul, 2023. "The convergence dynamics of economic freedom across U.S. states," Southern Economic Journal, John Wiley & Sons, vol. 89(4), pages 1216-1241, April.
    2. Ryan H Murphy, 2020. "Does democracy die in recessions? A descriptive analysis of aggregate demand shortfalls and regime transition," Economic Affairs, Wiley Blackwell, vol. 40(1), pages 63-76, February.
    3. Ryan H. Murphy, 2019. "The long‐run effect of government ideology on economic freedom," Economic Affairs, Wiley Blackwell, vol. 39(1), pages 101-114, February.
    4. Robert A. Lawson & Ryan Murphy & Benjamin Powell, 2020. "The Determinants Of Economic Freedom: A Survey," Contemporary Economic Policy, Western Economic Association International, vol. 38(4), pages 622-642, October.
    5. Vítor Castro & Rodrigo Martins, 2021. "Economic liberalization, political regimes and ideology," Kyklos, Wiley Blackwell, vol. 74(4), pages 463-487, November.

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