• Describe and explain the demise and rise of the relevance of culture and institutions in the history of economic thought and the history of economics; 
• Define culture and institutions and be able to explain the different methods used for measuring these concepts;
• Analyze and criticize studies in the field of culture and economics;
• Summarize and assess academic papers in the field of culture and institutions.
   

Economic theory, which assumes rationally acting individuals, fails to explain many economic phenomena. Puzzles include the home bias of international portfolio investments, the home bias in trade and the exchange rate disconnect puzzle. Culture, in the sense of norms and values  common to a group of persons, has been offered as an explanation for this difference between economic theory and reality. Moreover, cultural differences have also been suggested as an explanatory factor for crises such as the European sovereign debt crisis and for the failure of mergers and acquisitions. Finally, culture along with institutions are thought to be important for the development of countries. In this course we investigate whether culture can help us explain stylized facts. Attention is paid to the use of culture throughout the history of economics, and its current use in international economics and politics, finance, economic development and international business. The course consists of two parts. The first part deals with the evolution of culture in economics, the concept of culture and how it is measured and applied. The second part of the course concerns the role of culture for specific fields such as international policy, development, and international business.