Economic

Institutions
 If you have been given
something, is it expected
for you to return the
favour?
Why or Why Not?
• Institutions are basically durable systems
of established and embedded social
rules that create a social structure for
social interactions (Hodgson, 2001).

• Are the formal and informal rules that

organize the economic flow and activity of
a society (Kelly, 2012).
Reciprocity is a form
of gift exchange
between two parties
wherein return is
expected after
product or gift giving
(Parry, 1986).
TRANSFER PAYMENTS

Are payments that are made without any good

or service being received in return (Bishop,
2012)
REDISTRIBUTION
• It is the act of
the
government to
distribute
income from
the wealthy
businesses and
citizens to the
less wealthy
(Mares, 2014).
MARKET TRANSACTIONS: PURCHASES
Buyer and seller
interact with
one another to
exchange
goods for an
amount of
money (Arcinas
& Mactal, 2016).
MARKET TRANSACTIONS: LOANS
• Loans are money
advanced to a
business with an
interest charge that
must be paid and
returned at some
point in the future
(Peavler, n.d.)
MARKET TRANSACTIONS: LOANS (MORTGAGE)
• Type of loan that
was created for
purchasers to be
able to make
homeownership
more attainable
(Amadeo, n.d.)
MARKET TRANSACTIONS: BANK ACCOUNTS
MARKET & STATE
MARKET
• A system of private ownership and enterprise
that acts based on their own private and self-
interest (Schmalensee, 2013).

STATE
• The governing body of the society (Arcinas &
Mactal, 2016).
MARKET & STATE
A good Government should……
1. On a macro or bigger
scale, how can you see the
power and influence of the
economic institutions?
Assignment:
• Economic Realization
• Capture a recent economic activity in your
vicinity and make a “HUGOT” out of that
certain scenario.
• Oslo Paper – Deadline (NEXT MEETING) ϋ