Convergence Analysis on Ten Sub-Indexes of Economic Freedom

Abstract

The purpose of this paper is to examine the transition of ten sub-indexes of economic freedom among 130 countries in the world. The three central questions of this study are: do economic freedom sub-indexes converge? Do some sub-indexes of economic freedom display more clear-cut convergence when their index points are increasing over time? Which clusters of economic sub-indexes display faster rate of convergence? Analyses of sub-indexes of economic freedom are critical because each of these individual sub-indexes independently determines final value of the overall index. The answer to the first question varies by each specific sub-index. The answer to the second question is that countries with increasing index points display much more clear-cut convergence. As for the third question, those sub-indexes receiving high index points from large number of countries exhibit faster rate of convergence. Several policy implications are discussed in conclusion.