The Index of Economic Freedom is a measure of economic freedom that was created by The Heritage Foundation and The Wall Street Journal in the mid-'90s. The index can be used to compare the economic freedom among nations, as well as how each nation (and the world overall) is getting better or worse compared to the past. See: GINI Index.
Spoiler alert: the world is getting more economically free, slowly but surely. The U.S. is in the top 20, but is no match for Hong Kong, which has been number one many times (although maybe not for long, as Hong Kong gets reincorporated into China, which isn’t even in the top 100 countries ranked).
So how does one measure economic freedom, anyway? The Index of Economic Freedom measures private property rights and enforcement, the nation’s judiciary, the nation’s integrity (i.e. level of corruption, Somalia a perpetual winner), government taxes and spending, business regulations, labor rights, inflation and price controls, trade barriers, and bank regulations. So...just about everywhere money...is.
Perhaps unsurprisingly, there’s a general correlation of more income per capita with more economic freedom. Still, the index has its critics, who argue that economic freedom doesn’t correlate with economic growth.
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Econ: What are Distributional Effects?0 Views
And finance Allah shmoop What are distributional effects All right
people Their economic policies you know things like taxes or
central bank policies Will the impact different groups of people
in different ways These are the distributional effects I eat
the way policies get distributed throughout a population right People
feel them differently Your town wants to attract more tourists
So the City Council decides to build a museum of
modern macaroni art Mama They need money for construction and
decide to pass a new tax to pay for it
After a lot of debate they enacted ten per cent
tax on all products related to beard maintenance So an
additional ten percent tax is added to all sales of
beard trimmers or beard wax or scented beard oils all
the stuff that a healthy beard needs Obviously this tax
hits some parts of the community harder than others In
general men need These products are whole lot more than
women at least more than most women anyway Also members
of the Civil War generals reenactment society end up paying
more in the beard tax Then the people should look
more like Dolphins swimming club run by Michael Phelps There
Greek Orthodox priests pay it more than members of the
Boy Scouts and so on the different parts of the
population and get distributed effects differently right That's distributional effects
at work Well distributional effects track the way the impacts
of an economic policy gets distributed among individual actors in
an economy and it comes up a lot In real
life central banks have to decide howto handle inflation policy
For example higher inflation helps people who have borrowed money
As wages go up they have more cash to pay
back loans which tend to have had fixed dollar amounts
and set interest rates Meanwhile lenders get better deals when
inflation is low anyway So yeah those were some of
the distributional effects of a country's inflation policies of relating
to the central bank and borrowing money anyway Different groups
are impacted in different ways The distributional effects can also
lead to behavior changes Like when your town's beard tax
went through well it encouraged a whole lot of people
to just shave their beards The Civil War Generals reenactment
society voted twelve the one to cut off their long
luxurious chin decorations and rebrand themselves as the Vietnam War 00:02:15.97 --> [endTime] generals re enactment society Oh
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