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Institutions are a key determinant for growth. I am very happy to have pursued my research at a very good and stimulating institution, namely at the institute for Empirical Research in Economics (lEW). My special thanks go to my thes- supervisor, Josef Zweimueller. With great enthusiasm, he pointed me towards interesting research subjects. It was a very fruitful collaboration, which allowed me to start quickly my dissertation. Josef Falkinger, my co-advisor, was always an excellent discussant - not only in economics - and I profited from his useful com- ments on earlier versions of this dissertation. Daron Acemoglu, Philippe Aghion, Marios Angeletos, Giuseppe Bertola, Oded Galor, Omer Moav, and Gilles Saint- Paul provided very valuable comments and suggestions to topics related to this dissertation. I gratefully acknowledge the support and numerous discussions with my colleagues, especially with Zava Aydemir, Men-Andri Benz, Johannes B- swanger, Markus Knell, Volker Grossmann, Urs Meister, Manuel Oechslin, and Niels Zilkens. Furthermore, my research also profited much from the interplay be- tween teaching and research, as it was a very satisfactory task to guide ambitious students to macroeconomic problems. Finally, I want to thank my parents. Marcel and Rosemarie Foellmi-Kuster, for their great support. As entrepreneurs, they provided me, early on, with a critical view on economic problems and puzzles. Jede Forschungsarbeit profitiert ungemein von einem anregenden Umfeld. Ich hatte das Gliick, am Institut fiir Empirische Wirtschaftsforschung (lEW) solche vi Preface idealen Bedingungen vorzufinden.