Regulations & Economic Growth
Are government regulatory expansions associated with reduced economic growth?
Correct Answer
Productivity is the primary driver of economic growth and living standards. A study published by the Journal of Economic Growth in 2013 found that federal regulatory expansions are associated with "substantial reductions" in economic growth. Likewise, federal regulations spiked and productivity growth crashed during the presidencies of Jimmy Carter (1977-1980) and Barack Obama (2009-2016). Like the vast majority of economic studies, these data only show associations, and association does not prove causation. However, there are numerous mechanisms by which regulations can hamper economic growth, as detailed at the first link below.
DocumentationRegulations & ProductivityJournal of Economic Growth