Institutions As A Fundamental Cause Of Economic Development

INSTITUTIONS AS A FUNDAMENTAL CAUSE OF LONG-RUN GROWTH DARON ACEMOGLU 1 , Department of Economics, MIT, 50 Memorial Drive E52-3806, Cambridge, MA 02142 e-mail: damn@mit.edu SIMON JOHNSON Sloan School o f h f a ~ g e m e n t , MIT, 50 Memorial Drive, Cambridge, MA 02142 e-mail: sjohnson@mit.edu JAMES A. ROBINSON Deparhnent of Government, WCFIA, Harvard University, 1033 Massachusetts Avenue, Cambridge, MA 02138 e-mail: jmbinson@gov.harvard.edu Contents Abstract Keywords 1. Introduction

With the development of global economics, the volatility of global stocks market reflects the economic situation across a number of countries. As a result, each nation’s fluctuation of stocks plays a significant role in its own economy. Furthermore, the financial stocks that act as an important sector of the whole stock market are caused fluctuating by a large number of factors. Without exception, there is a great number of reasons for the volatility of Australian financial stocks, which cause the whole

2.1 New Institutional Economics (NIE) perspective: Institutions Matter! During the last decades the idea that high quality institutions are positively related to economic growth and development (Acemoglu et al., 2005) has gained relevance in the mainstream academic scene as well as within international organizations and cooperation agencies. The phrase Institutions Matter! epitomizes the essence of the New Institutional Economics approach and its policy implications. Certainly, a set of “Global Standard

Economic growth is defined as a positive change in the level of production of goods and services by a country over a certain period of time. It is usually measured using GDP and labour earnings. Economic development is defined as sustainable increase in living standards. It entails increased per capita income, better education and health as well as environmental protection. Characteristics of economic growth 1. Education: A country with an educated populace generally records higher levels of

worked. World System Theory is like colony philosophy recommends that having it made that each community help from other community’s and maneuver those community’s civilians. In disagreement to theory on the other hand this classical recollects the fundamental assistance that are appreciated by inferior consequence community’s in the world system theory. The theory created with the way a community is combined into the landowner. World System Theory completes how the Industrial proceeds in that comminution

Those considered poor in developing countries often lack the fundamental access to buy adequate food, water, or other basic needs. Although recent World Bank data has revealed that world poverty has declined 43 percent since 1990 and 52 percent since 1981, poverty is still a worldwide phenomenon that is prevalent even among the most highly industrialized countries . Presently, according to World Bank data, “1.22 billion people live on less than $1.25 a day in 2010” and “2.4 billion people live on

organizations or institutions that promote different approaches to resource management, including common resources, ecosystem approaches, participatory action, and so on. Starting with a summary of two different philosophies - economic approach and sustainable development - towards resource management, an interpretation of findings will be applied to a particular methodology of the latter in the case of European Union, and how it has been applied. Economic Approach The theory of economic growth, developed

Federal Reserve no longer deliver the economic growth they were once believed to. Keynesian economics has proved to not be as effective as once thought, which has led to the Federal Reserve choose alternative means to stimulate the economy and indirectly manage exchange rates (Hakkio, 1986). The uncertainty over interest rate polices has fortunately not led to increases in inflation, which has typically been the case in the past (Kopcke, 1988). The current economic conditions and the approaches the Federal

NBER WORKING PAPER SERIES INSTITUTIONS AS THE FUNDAMENTAL CAUSE OF LONG-RUN GROWTH Daron Acemoglu Simon Johnson James Robinson Working Paper 10481 http://www.nber.org/papers/w10481 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 May 2004 Prepared for the Handbook of Economic Growth edited by Philippe Aghion and Steve Durlauf. We thank the editors for their patience and Leopoldo Fergusson, Pablo Querubín and Barry Weingast for their helpful suggestions. The

Weekly Readings Summary Title of Assignment: Session 12- Commentary and Question Student Name; Adem Y Arslan Course Number and Name; GOV633 – Politics and Development Aid Professor; Dr. Randolph Adams Submission Date; 11/14/2016 CHAPTER 11-12 (p; 302-367) VIRTUOUS & VICIOUS CIRCLE In this chapter, the authors explain Virtuous and Vicious Circle, summarize of