Publication Details
Abstract
In this study, we have reviewed the paper focusing on the macroeconomic factors related to monetary freedom and realized the relevance of policy and institutions to improve the policy environment for free-market economy. The components of economic freedom: Monetary freedom manifests itself to show that to what extent its monetary policies allow stable currency, lower inflation rates and less distortions of prices. The study also compares different economies, assesses macroeconomic balances like inflation, fiscal, balance of payment, and exchange rate stability, as well as analyses how highly-powered forms of institutions like central bank independence, regulatory quality, and governance transparency affect the economy. The evidence shows the positive correlation between sound institutions and moderate policy decisions that enhance a central bank’s monetary autonomy due to stability and reduced inflation and limiting of government interference. The findings of the investigation are useful for policy makers, stressing the need to strengthen the institutions and to coordinate the macroeconomic strategies with the ideas of economic liberty to further growth and develop sustainability and resilience.