Economic Freedom and Real Income

This article further investigates the critical relationship between economic freedom and real income levels. Treating member nations of the OECD as de facto economic and political regions, the estimations in this empirical study all provide strong support for the three hypotheses considered here: (1) the higher the overall degree of economic freedom, the higher the per capita real income level; (2) the higher the level of regulatory quality, the higher the level of per capita real income; and (3) the higher the tax burden, expressed as a percent of GDP, the lower the level of per capita real income