At this point in time, the correlation between the Heritage Foundation's index of economic freedom and economic growth is unambiguously negative. I suspect this is because being a poor country is associated with low economic freedom but high catch-up growth.
To test this hypothesis, I did a linear regression of overall score, each of the ten subscores and 2013 real GDP growth against the log of 2013 GDP per capita (at parity). I then took the correlation between the residual of 2013 real GDP growth and the residual for each of the scores. Here are the results: overall score -0.04 property rights -0.15 freedom from corruption -0.11 fiscal freedom 0.25 government spending 0.18 business freedom -0.03 labor freedom 0.05 monetary freedom -0.12 trade freedom 0.01 investment freedom -0.18 financial freedom -0.09
These results were approximately opposite of what I expected (I expected minimal correlation for fiscal freedom and government spending and generally positive correlations for everything else). While I'm only somewhat surprised by the government spending and fiscal freedom results, I find the others very confusing. Does anyone have any idea what might be going on?
At this point in time, the correlation between the Heritage Foundation's index of economic freedom and economic growth is unambiguously negative. I suspect this is because being a poor country is associated with low economic freedom but high catch-up growth.
To test this hypothesis, I did a linear regression of overall score, each of the ten subscores and 2013 real GDP growth against the log of 2013 GDP per capita (at parity). I then took the correlation between the residual of 2013 real GDP growth and the residual for each of the scores.
The analysis ...
What is something you used to believe, preferably something concrete with direct or implied predictions, that you now know was dead wrong. Was your belief rational given what you knew and could know back then, or was it irrational, and why?
Edit: I feel like some of these are getting a bit glib and political. Please try to explain what false assumptions or biases were underlying your beliefs - be introspective - this is LW after all.