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Institutions and (Short-Run) Macroeconomic Performance

  • Hargreaves Heap, Shaun P

This paper reviews the growing interest in institutions. It argues that the explanation for this interest is a fresh awareness of how institutions affect economic performance. This connection arises because many economic interactions take the form of one or other of three "classic" games (prisoners' dilemma, coordination and chicken) and the outcome in these games (and hence performance of the economy) is influenced by the institutional context of these interactions. The paper provides a detailed illustration of this argument with a survey of the literature which relates unemployment performances to the institutions of wage setting in OECD countries. Copyright 1994 by Blackwell Publishers Ltd

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Article provided by Wiley Blackwell in its journal Journal of Economic Surveys.

Volume (Year): 8 (1994)
Issue (Month): 1 (March)
Pages: 35-56

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Handle: RePEc:bla:jecsur:v:8:y:1994:i:1:p:35-56
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