Document Type : Research Paper
Many studies in the economic literature have devoted to analysis the effect of economic freedom on the economic growth and income per capita, but less study have analyzed the effect of economic freedom on the economic fluctuations. This Study has analyzed the effect of economic freedom on the economic fluctuations for 48 developing countries over the time period 2000-2010. To measure economic fluctuations two indices, “standard deviation of GDP growth” and “GDP fluctuations”, and for economic freedom “Fraser Institute Index” have been used. Models estimation has done by using cross section and panel data and results show that an increase in the economic freedom index reduces economic fluctuations.