The United States (US) capitalism (C), democracy (D), rule of law (R) (CDR) economic model combines the degree of C, D and R associated with a particular state. In prior research, the CDR model was invented and computed for cross-country relationships. This paper computes a CDR model based on published US state C, rankings in D, and rankings in R, taking into account the effect of interactions between C, D and R. The CDR model explains per capita real gross state product (GSP) adjusted for purchasing power parity (GSPppp) with three policy variables namely C, D and R. Geographical latitude (L) is also significant. The model is referred to as the CDR model because C, D and R are policy variables that can be changed by policy makers, while geography is outside the control of policy makers.
KeywordsCDR IndexGSPpppCapitalismDemocracyRule of LawEntrepreneurship
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