The Rise of New Institutional Economics and Its Relationship with Neoclassical Economics

New institutional economics as a branch of economics is whether revision of neoclassical economics or new paradigm shift.To great extent new institutional economics is different from the neoclassical economics under perfect information and perfect rationality，which deals with zero transaction cost.However in reality，current or future transaction will be influenced by transaction cost,hence we relax the assumptions of perfect information and rationality,rebuild the relationship between new institutional economics and neoclassical economics as well as old institutional economics.Therefore we provide some solutions to transaction cost problem in order to guide the real-world economy.Particularly for Chinese modernization，we will focus mainly on new institutional economics,away from Neoclassical economics，hence to redesign the institutional and policy innovations as a cornerstone modern institutional economics，for example reduce transaction costs and information asymmetry，and property rights and national governance and so on to promote high quality development .