key_terms_mt_1 - Key Terms for ECN 111A MIDTERM 1 1 Path...

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Key Terms for ECN 111A MIDTERM 1 1. Path Dependence i. Path dependence is a concept wherein the set of outcomes depends upon the set of past actions ii. We talked about this in class with regard to why we bother studying history from an economic perspective. iii. It is relevant because historical decisions can have persistent outcomes iv. E.g., Blue-ray vs. HD DVD, QWERTY vs. Dvorak, languages, external economies of scale 2. Cliometrics i. Cliometrics is the application of economic theory and econometric techniques to the study of history ii. We talked about this in class because it's our main methodology in this course iii. It is relevant because of b iv. E.g., running a regression on historical price data to see the implications of a tax 3. Cape of Good Hope i. The Cape of Good Hope is a point near the southern tip of the African continent. It marks an important point in the journey around Africa. It was first reached by Portuguese navigator Bartolomeu Dias in 1488. ii. We talked about it in class because it is important to the discussion of Portuguese attempts to circumvent the Italian monopoly on trade with Asia. iii. Relevant in the discussion of Mercantilism for the above reason and so that Portugal could realize profits on Asian goods. 4. Treaty of Tordesillas (1494) i. The Treaty of Tordesillas was a treaty signed in Tordesillas, Spain between Portugal and Spain which gave Spain all land more than 370 leagues (~2061 km/1281 mi) west of the Cape Verde Islands. Lands to the east belong to Portugal, lands to the west to Spain. ii. We talked about this in class because it pertains to the history of Spanish and Portuguese exploration to circumvent the Italian trade monopoly with Asia. iii. It is relevant to the discussion of Mercantilism because the resources available in South America would allow Spain and Portugal to acquire more gold and silver, as well as natural resources that were unavailable in Iberia. 5. Joint Stock Companies i. A joint-stock company is a type of corporation involving multiple parties who own shares of the corporation. Tradable shares are issued in exchange for financial contributions. ii. We talked about this in class with regard to British colonies because it was the way that firms overcame the costs of establishing colonies in North America.
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iii. JSCs are relevant because they solve funding and risk problems for new colonies and enabled these entities to exist. 6. London Company (Virginia Company) i. Established the Jamestown settlement in 1607 (the first successful British settlement on mainland North America.) ii. The conditions were very harsh (2 year life expectancy for early settlers) iii. Early on there was an unsustainable collective structure that did not include strong work incentives iv. Established a foothold for colonization in the New World 7. Plymouth Company i. Established the New Plymouth settlement in 1620 ii. Along with Jamestown settlement, one of the earliest successful colonies founded by the English in North America; first large settlement in the New England area
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key_terms_mt_1 - Key Terms for ECN 111A MIDTERM 1 1 Path...

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