Cornell University & University of Indonesia, Indonesia

The notion that something cannot be measured does not exist seems to apply in the absence of culture in economics where the role of institutions is at the center of the link between the two. Yet, any economic prosperity, crisis, or deprivation, are the results of human behavior reflecting the outcome of social learning-a central concept of culture. Institutions and culture interact and evolve in a complementary way. They can affect the process of exchange and the transaction costs, which in turn determine the economic performance. Although more work has been done to understand better the interrelation between economics and culture, most remain fell on deaf ears among mainstream economists even though real world cases have shown the critical role of such an interrelation.