By James Gwartney, Robert Lawson
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Countries that use a private banking system to allocate credit to private parties and refrain from controlling interest rates receive higher ratings for this regulatory component. Many types of labor-market regulations infringe on the economic freedom of employees and employers. Among the more prominent are minimum wages, dismissal regulations, centralized wage setting, extension of union contracts to nonparticipating parties, and conscription. The labormarket component (5B) is designed to measure the extent to which these restraints upon economic freedom are present.
Countries that use a private banking system to allocate credit to private parties and refrain from controlling interest rates receive higher ratings for this regulatory component. Many types of labor-market regulations infringe on the economic freedom of employees and employers. Among the more prominent are minimum wages, dismissal regulations, centralized wage setting, extension of union contracts to nonparticipating parties, and conscription. The labormarket component (5B) is designed to measure the extent to which these restraints upon economic freedom are present.
At the very least, these figures suggest potential fruitful areas for future research. org/1SF48T40L0>. 35,000 GDP per Capita, PPP (constant 2005 international $), 2007 Countries with more economic freedom have substantially higher per-capita incomes. org/1SF48T40L0>. 5 Annual Growth Rate (%) of GDP per Capita (constant PPP$), 1990–2007 Countries with more economic freedom have higher growth rates. org/1SF48T40L0>. 1 Foreign direct investment, net inflows (% of GDP), 1990–2007 Countries with more economic freedom attract more foreign investment.