Jennifer Edwards

Economic History of Europe

September 14, 2010

Prof. Alpert

Mr. Douglas North proposes his new framework which is the new institutional economics which it entails the institution property rights, transaction cost, economic organization in history and the economic development of countries. In the chapters 4, 5 and 6 Mr. North explains about his framework and he breaks them down in details. Mr. North uses many examples to describe different sections of his framework starting with “Analyzing Economic Organization in History,’ Mr. North starts off by saying that “One must be able to measure the quantity of a good in order for it to be exclusive property and to have value in exchange. Where most measurements cost is very high, the good will be a common property resource. The technology of measurement and the history of weights and measures is a crucial par of economic history since as measurement costs were reduced the cost of transacting was reduced.” (North, 1981)

When you look at things like economic growth and how it can be either negative or positive. When I say that economic growth is either negative or positive I mean it could be shrinking our increasing. If the economic growth is negative or shrinking I would say that we are in an economic depression and recession. In some cases when economic growth increases the some available labor increases as well. If you look at economic growth and quality of life it improves up to a certain limit and after it will probably obstruct the way of living.

Cost of living is another example I would use this kind of situation that Mr. North talks about is measurement costs. Cost of living can be different in every country depending on the economic climate. In some countries especially in Europe some countries are poor and their citizens are poorly paid whereas there are countries that