Abstract:

The paper aims to determine the practical applicability of the indicator of economic freedom in economic policy. The problem areas that arose in connection with the given aim, had a significant influence on the determination of the goal of the work. We were interested in, whether a small degree of economic freedom is the cause of slow economic growth and development, or if the causal link going in the opposite direction? Is the relationship between these elements and economic freedom the same always and everywhere? To answer these questions, we perform a series of analyzes on the data panel of the V4 countries for the period 2000-2019. Based on the obtained results, we identify those factors whose development is strongly related to the development of economic freedom. The results suggest that economic freedom is strongly correlated with public debt, exports, and the level of unemployment, is reflected in the values of these elements and at the same time is significantly affected by these elements. The strength and nature of their relationship with economic freedom vary across the group. Therefore, they cannot be considered as indicators of the state of economic freedom. Contrary to some published findings, little evidence has been obtained that economic freedom significantly affects economic growth.