ECON 334 Lecture Notes - Lecture 10: Instrumental Variable, England In The Middle Ages, Econometrics
Document Summary
Last lecture recap: were institutions responsible for the slow growth in the malthusian world, clark contends they were not. Medieval england (and many other european countries) had very good political and economic institutions. They responded to, rather than determined, economic performance: according to north, institutions are determinant for economic growth. They increased capital mobility, reduced information costs, and helped spread risk in medieval europe. They allowed for a greater scope of economic transactions. High values denote good institutions: economic performance is measured as gdp per capita. Alternative measures of institutions: gdp and protection against expropriation. It also displays a strong positive correlation with gdp per capita. Alternative measures of institutions: the cost of doing business: an important measure of the institutional environment is how costly it is to transact. Let"s look at the (cid:272)ost of i(cid:374)(cid:272)o(cid:396)po(cid:396)ati(cid:374)g a business (expressed as a percentage of gdp per capita).
