THE IMPACT OF FINANCIAL STABILITY AND ECONOMIC FREEDOMS ON ECONOMIC GROWTH: EVIDENCE FROM DEVELOPING COUNTRIES WITH NEW QUANTITATIVE MODELS

Abstract

This study examines the effect of financial stability and economic freedom levels of developing countries on economic growth. A financial stability index was calculated in this study to represent the financial stability of developing countries, whereby the Heritage Foundation "Economic Freedom Index" was used to represent their economic freedom. Econometric analyzes were conducted within the framework of the 2000-2020 period in 16 developing countries of the upper-middle income bracket. As a result of the models estimated utilizing the Moment Quantile Regression Method (MM-QR), it was observed that the effect of economic freedom and financial stability on economic growth is positive and statistically significant for the country group. These research findings hold significant implications for policy makers, economists and researchers.