The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Transaction Costs, History Of

  • M. Klaes
Reference work entry


While the basic insight that underlies the transaction cost concept is probably as old as human reflection on economic issues itself, it became associated in the 19th century with the notion of economic friction, which was subsequently expressed as a cost. Historically, the transaction cost concept has developed from narrow interpretations typical of the monetary and general equilibrium literature towards relational interpretations, based on particular market microstructural models of how economic agents interact with each other, and finally with institutional interpretations embracing a more general analysis of economic institutions, including market and non-market forms of coordination.


Cash balances Circulation cost Coase, R. H Contract theory Coordination problem Firm, theory of Frictions Institutional economics Institutional transaction cost economics Law and economics Link costs Modularity Money New institutional economics Non-market coordination Organization, economics of Productive and unproductive labour Property rights Transaction cost economics Transactions costs Transactions demand for money Marschak, J Williamson, O. E 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • M. Klaes
    • 1
  1. 1.