Emergence of modernity

Question 1

4 Key differences in 1800 vs. before

Answer 1

1. Lower interest rate
2. Gowth in literacy and numeracy
3. Increased working hours
4. Lower interpersonal violence

Question 2

rea interest rate equation

Answer 2

r = ρ + d + ψ

Question 3

p=

Answer 3

rate of time preference (preference to consume today instead of later)

Question 4

d=

Answer 4

Default risk premium (compensation for risk burrower wont pay)

Question 5

ψ=

Answer 5

premium reflecting income growth (assumption that people who burrow today will be richer in future)