A next step forward in examining economic growth and institutions is examining the frequency, timing and magnitude of “growth episodes”—discrete accelerations and de-celerations in medium to long run growth. This will be challenging as to the extent that very long-run causes and consequences of institutions help determine causality this long-run approach with slowly evolving institutions obviously has a difficult time with explaining discrete turning points.
This paper does three things:
- it documents a definition and method for determining the frequency and magnitude of growth episodes.
- it discusses how the “product space” approach to export structure can help understand the joint dynamics of economic growth and institutions.
- it discusses the relationship of measures of “institutions” to policy implementation and how “closed ordered deals” provide growth accelerations but that the dynamics of institutions during “closed ordered deal” growth determine the duration and lasting effect of a growth episode.