Index of Economic Freedom Essay - 908 Words

The steady stream of current world events provides us with the signs to be read if we only take the time and the intention to pay attention to those lessons. The economic view provides a robust language for understanding the basic physical reality of scarcity, and the varied human beliefs and responses we take as we attempt to deal with that scarcity. As Smith and Ricardo teach us, the subtle and important understanding lies in the space between what human desires dictate in the personal scale, in the short run; and what consequences play out on the grand scale, in the long run. In this paper we look at the proxy effects of policies intended by governments to forge policies in the short run, as compared to the inevitable effects that flow†¦show more content†¦The following table shows the results: Fraser Institute : Heritage Index Correlation: 0.9276 Ease of Doing Business, World Bank : Heritage Index Correlation: 0.9606 Freedom House, Civil Liberties Index : Heritage Index Correlation: 0.8205 This data makes clear that the Heritage Index, even if biased, correlates strongly with measures from other organizations, calculated with different methodologies, for different purposes. The Heritage Index is calculated using ten sub-indices as measures of relevant components of economic freedom. These sub-indices produce an overall composite score. The list of indices and some detail on what they measure is as follows: Business Freedom; the general barriers to entry and exit of the market, procedures, licenses, time, cost, and difficulty in starting a business. Trade Freedom; tariffs and quote barriers to import and export, price, investment, and regulatory restrictions, as well as direct government intervention such as domestic subsidy. Monetary Freedom; measures of price stability and price controls, inflation rate over a three year period. Investment Freedom; the ability to transfer money and investments across borders, transparency and bureaucracy, nationality prescreening, res trictions on land ownership, industry sector restrictions, expropriation or nationalization without compensation, access controls on foreign exchanges,Show MoreRelatedCorruption Of Corruption And Corruption1445 Words   |  6 Pagesgreat amount of corruption and their relationship with the people. First, it will help to look directly at countries who have still sustained with such tough conditions. Second, the relationship between economic growth will be explored in relation to social well-being. 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