Evangel's IB Economics Blog

Neo-classical economists believe that economy should be let free of government intervention. They believe that government should not set labor unions, days of holidays, price floors, price ceilings, etc. Thus, they think that unemployment would be low in countries where economy if free. Is this true? Consider the data below:

(Data 1) Economic freedom and unemployment

According to this data, it seems that the neo-classical economists are quite reasonable. As government intervene more in the economy, the unemployment seems to rise. However, this is not the complete truth because of some fluctuation in the data.

References: Economic freedom rank, Unemployment