ABSTRACT
The focus of this chapter is to critically evaluate the hypothesis that economic freedom is a significant causal variable in the determination of real per capita income. Economic freedom is broadly defined and relates most closely to the proxies typically used for economic freedom in empirical studies. Although I do find that economic freedom is a necessary condition to achieve high and higher levels of per capita income; this is largely in terms of threshold effects or critical values as opposed to persistent marginal effects. In other words, more and more economic freedom does not appear to yield higher levels of per capita income. Moreover, I find that the use of aggregate measures of economic freedom can generate misleading results given that they comprise different sub- indexes that do not always correlate in a similar fashion with per capita income.
