IESET.
Hypotheses·regulatory·gfc_contraction_depth_liberalised_vs_state_managed_systems

The 2007-2009 global financial crisis produced deeper and more persistent output contractions in liberalised financial systems (United States, United Kingdom, Ireland, Iceland) than in more state-managed financial systems (China, Vietnam), controlling for pre-crisis openness, exchange-rate regime, and fiscal space.

The discriminating variable is the degree of state control over credit allocation and bank balance sheets heading into 2007.

INCONCLUSIVEengine/runs/gfc_contraction_depth_liberalised_vs_state_managed_systems

INCONCLUSIVE_DATA_PENDING — treatment 'liberalised_financial_system_indicator' has no within-country variation under country fixed effects

confidence cueResult card produced; verdict unclassified.

policy briefCoverage too thin

In ordinary language

When countries open more of the economy to trade and competition, do people end up with better long-run income or productivity outcomes?

plain answer

This test cannot make a firm call yet. treatment 'liberalised_financial_system_indicator' has no within-country variation under country fixed effects

why it matters

This matters because regulatory claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 19 country or place units from 2003 to 2012, using a panel fe design, with fixed effects for country and year.

what was measured
What changed
  • Liberalised financial system indicator
  • Financial freedom index
What we checked
  • Log real income
  • Cumulative income decline 2007 2010
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/gfc_contraction_depth_liberalised_vs_state_managed_systems
1007550250200320082012USAGBRIRLISLCHNVNMIND
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show log_real_gdp across 19 sampled countries over 2003–2012.
The shapes above are stylised — none of the lines are real data.
Placeholder for gfc_contraction_depth_liberalised_vs_state_managed_systems. Published chart will be generated from engine/runs/gfc_contraction_depth_liberalised_vs_state_managed_systems/chart_data.json.

Who has skin in the game — schools predicting on this

1 school list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

Marxism-Leninism (central-planning implementation)wins if SUPPORTEDpartial/no-call

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-06-29T17:54:29Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

The 2007-2009 global financial crisis produced deeper and more persistent output contractions in liberalised financial systems (United States, United Kingdom, Ireland, Iceland) than in more state-managed financial systems (China, Vietnam), controlling for pre-crisis openness, exchange-rate regime, and fiscal space. The discriminating variable is the degree of state control over credit allocation and bank balance sheets heading into 2007.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

The hypothesis is SUPPORTED if the 2007-2010 cumulative real GDP decline in the liberalised-system panel exceeds that of the state-managed panel by at least 3 percentage points, conditional on matching on pre-crisis openness + exchange-rate regime + fiscal space. REFUTED if the gap is less than 1 percentage point or reverses in sign.

formal test & threshold
test:      Cross-country comparison of 2007-2010 cumulative real-GDP decline: liberalised panel (USA/GBR/IRL/ISL) vs state-managed panel (CHN/VNM); liberalised gap >=3pp deeper with p<0.10 conditional on pre-crisis controls supports.

Method

Template
panel_fe
Fixed effects
country, year
Clustering
country
Sample
19 countries · 2003 – 2012
Evidence type
associational

Cross-country panel-FE 2003-2012 of real GDP growth on liberalised- vs-state-managed-financial-system indicator interacted with crisis-window (post-2007Q3). Pre-crisis matching on openness + exchange-rate regime + fiscal space. Country and year FE; country-clustered SEs. Caveat: state-managed economies (CHN, VNM) had unrelated growth tailwinds — the contraction-depth comparison conflates regime-effect with structural growth differential.

Data

VariableSourceTransform
log_real_gdp
outcome
world_bank_wdi:NY.GDP.MKTP.KDtier 2
log
cumulative_gdp_decline_2007_2010
outcome
world_bank_wdi:NY.GDP.MKTP.KD.ZGtier 2
cumulative_window
liberalised_financial_system_indicator
treatment
constructed:indicator = 1 for USA, GBR, IRL, ISL (liberalised financial systems pre-2007); 0 for CHN, VNM, IND (state-managed credittier 5
indicator
financial_freedom_index
treatment
fraser_efw:area_3tier 4
level
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
exchange_rate_regime
control
ilzetzki_reinhart_rogoff:exchange_rate_regimetier 3
categorical
government_debt_pct_gdp
control
imf:GGXWDG_NGDPtier 2
level
log_gdp_per_capita
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — gfc_contraction_depth_liberalised_vs_state_managed_systems

Verdict: INCONCLUSIVE_DATA_PENDING — treatment 'liberalised_financial_system_indicator' has no within-country variation under country fixed effects

Pre-registration

  • Claim: The 2007-2009 global financial crisis produced deeper and more persistent output contractions in liberalised financial systems (United States, United Kingdom, Ireland, Iceland) than in more state-managed financial systems (China, Vietnam), controlling for pre-crisis openness, exchange-rate regime, and fiscal space. The discriminating variable is the degree of state control over credit allocation and bank balance sheets heading into 2007.
  • Falsification rule: The hypothesis is SUPPORTED if the 2007-2010 cumulative real GDP decline in the liberalised-system panel exceeds that of the state-managed panel by at least 3 percentage points, conditional on matching on pre-crisis openness + exchange-rate regime + fiscal space. REFUTED if the gap is less than 1 percentage point or reverses in sign.
  • Falsification test: Cross-country comparison of 2007-2010 cumulative real-GDP decline: liberalised panel (USA/GBR/IRL/ISL) vs state-managed panel (CHN/VNM); liberalised gap >=3pp deeper with p<0.10 conditional on pre-crisis controls supports.

Estimate

  • Error: treatment 'liberalised_financial_system_indicator' has no within-country variation under country fixed effects

Variables resolved

  • world_bank_wdi:NY.GDP.MKTP.KD → log_real_gdp (outcome, publisher=world_bank_wdi, n=12104)
  • world_bank_wdi:NY.GDP.MKTP.KD.ZG → cumulative_gdp_decline_2007_2010 (outcome, publisher=world_bank_wdi, n=13897)
  • constructed: indicator = 1 for USA, GBR, IRL, ISL (liberalised financial systems pre-2007); 0 for CHN, VNM, IND (state-managed credit allocation, large state-bank share). Coding from Fraser EFW financial-freedom subindex deltas + IMF Financial Development Index. → liberalised_financial_system_indicator (treatment, publisher=constructed, n=190)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, publisher=world_bank_wdi, n=10714)
  • imf:GGXWDG_NGDP → government_debt_pct_gdp (controls, publisher=imf, n=8113)
  • world_bank_wdi:NY.GDP.PCAP.KD → log_gdp_per_capita (controls, publisher=world_bank_wdi, n=12104)

Variables missing data

  • fraser_efw:area_3 (treatment, name=financial_freedom_index) — vintage not on disk
  • ilzetzki_reinhart_rogoff:exchange_rate_regime (controls, name=exchange_rate_regime) — vintage not on disk

Generated by scripts/run_panel_fe.py at 2026-06-29T17:54:29+00:00

Notes

Origin is auto-generated Phase-4E stub seeded from Marxist-Leninist framing of GFC contraction depth as deeper in liberalised vs state-managed financial systems. Human review required.

Authored framework. Read the transparency note.