Mactoeconomics

We explore whether education plays a key role in determining economic liberty. Baseline estimates suggest that the educational level of a country, as measured by the average years of total schooling, is a significant contributor to economic freedom. To isolate exogenous variation, we use historical information on primary school enrollment rates and also rely on genetic information. We show that the exogenous component of education is strongly correlated with economic liberty after controlling for the influence of a number of other relevant factors. We identify access to information and media freedom as two channels through which higher education is translated into less interventional government policy. We offer non parametric evidence and demonstrate that the impact of schooling is non linear. At low levels of education its influence is negative implying that economic policies in favor of government intervention are more likely to prevail when the educational level of a country is l...

The aim of this chapter is to quantify the role of fiscal policy on the growth of the Greek economy, as well as on private investments and employment, through the estimation of fiscal multipliers. Special emphasis is given to the growth influence of the fiscal adjustment program of the period 2010–2013. At the first stage, a Structural Vector Autoregressive model is set up in order to estimate multipliers for various time horizons for both public spending and net taxes. Then we identify shocks for both taxes and public spending during 2010–2013, whose growth contribution is then estimated. The simulation results involve significant losses in output, private investment and employment, reinforcing our belief that fiscal contraction over this period has been highly detrimental to the growth of the Greek economy.