Long-Run Relatıonshıp between Economıc Freedom and Income Inequalıty: Evidence from G-7 Countrıes

Year 2020, Volume: 34 Issue: 2, 371 - 392, 13.04.2020

Zeki Akbakay

https://doi.org/10.16951/atauniiibd.542690

Cited By: 1

Abstract

Ekonomik Özgürlük ve Gelir Eşitsizliği Arasındaki Uzun Dönemli İlişki: G-7 Ülkelerinden Kanıtlar

Abstract

Abstract: This paper examines the long run relationship between
economic freedoms and income inequality in G-7[1]
countries overthe2000 – 2015period. The World Economic Freedom Index (EFW) that
created by the Fraser Institute is one of the methods of measuring economic
freedoms in a country. The EFW consists of five sub-indices: size of the
government, legal system and property rights, sound money, freedom to trade
internationaly and regulations. According to the results of this study, EFW
increases income inequality in G-7 countries. However, all of the areas of
economic freedom do not affect income inequality in the same direction. While
freedoms in government size and legal system areas has increased the income
inequality; freedoms in free trade to internationally, sound money and
regulation areas reduce income inequality.

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[1] United
States, Canada, United Kingdoom, Germany, France, Japan, Italy

Keywords

G-7 Countries, Economic Freedom, Income Inequality

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