Religion and Economic Growth: Was Weber Right?
Evidence of falling wages in Catholic cities and rising wages in Protestant cities between 1500 and 1750, during the spread of literady and the vernacular, is inconsistent with most theorretical models of economic growth. In the Protestant Ethic, Weber suggested an alternative explanation based on culture. Here, a theoretical model confirms that a small change in the subjective cost od cooperating with strangers can generate a profound transformation in trading networks.
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