Using Economic Freedom Indexes as Policy Indicators: An Intercontinental Example

We use time-series cross-section analysis to provide empirical validation for the existence of a specific American ethos and a specific European ethos with respect to economic policy. In our innovation, economic policy is proxied by “economic freedom” from the Fraser Institute database and constitutional “political institutions” are proxied by variables from the Database of Political Institutions (from the World Bank). Our results suggest that, once we control for political and institutional differences, the United States and Europe still pursue different economic policies.