Financial Crisis Reduces Economic Freedom in China and the West

Jul 31, 2009

(PhysOrg.com) -- The current financial crisis may reduce economic freedom as governments are likely increase intervention in a bid to protect their own economies - according to a study in Pacific Focus published by Wiley-Blackwell.

The paper entitled, “Geopolitics, Economic Freedom and Growth in and the West” provides an analysis of the current and its impacts on global economic freedom. By examining the divergent economic fate of China and the West after World War Two, the study demonstrates the positive correlation between economic freedom and prosperity.

The study also introduces the determinants of why China could begin catch-up growth after government reforms and provides an analysis of this growth during the late 1970s.

“The West was able to overcome mass poverty much earlier than China, because of its limited government, as a result of political fragmentation, and comparatively free markets. It was only after China liberated its markets and joined the capitalist world economy in the 1970s that she managed to catch-up with the West”, said author Dr. Erich Weede, a retired Professor of Sociology at the University of Bonn.

He added, “The that began in the US housing market and banking system has severely affected many countries around the world, and governments may succumb to the temptation of protectionist policies to shield their economies. Nevertheless, it is essential to remember the damage that protectionism caused during the last global depression and the benefits that economic freedom entails.”

More information: This article is published in the Pacific Focus (Vol. 24, Issue 2, pp. 131-160).

Provided by Wiley (news : web)

Explore further: Marcellus drilling boom may have led to too many hotel rooms

add to favorites email to friend print save as pdf

Related Stories

Water: More Valuable than Diamonds

Nov 07, 2006

A new study by University of Arkansas economists shows a strong relationship between economic freedom and access to water. David Gay and Charles Britton, economics professors in the Sam M. Walton College of Business, and ...

Lessons from the past can clarify banking crisis

Nov 14, 2008

Stricter regulation of the financial services sector is likely to result from the latest upheaval in national and global markets. It is being demanded by politicians of all parties while the Financial Services Authority, ...

Recommended for you

Marcellus drilling boom may have led to too many hotel rooms

Sep 18, 2014

Drilling in Pennsylvania's Marcellus Shale region led to a rapid increase in both the number of hotels and hotel industry jobs, but Penn State researchers report that the faltering occupancy rate may signal that there are ...

Entrepreneurs aren't overconfident gamblers

Sep 17, 2014

Leaving one's job to become an entrepreneur is inarguably risky. But it may not be the fear of risk that makes entrepreneurs more determined to succeed. A new study finds entrepreneurs are also concerned about what they might ...

User comments : 0