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Greasing the Wheels of Trade: A Profile of the Dutch Transaction Sector**


  • Hendrik Dalen
  • Aico Vuuren



How many resources does a nation spend on transactions costs to ‘grease the wheels of trade’? To examine this question the Dutch economy is used as a case study. The Netherlands are known as a nation of traders and this image was derived in the seventeenth century from successes in long distance trade, shipping and financial innovations. Despite its historical background the trading sector has never been adequately measured. In this paper, we present a first attempt in measuring and describing the Dutch transaction sector. Measurement by means of occupational data points out that approximately 25% of Dutch workers is employed in transaction jobs, and 29% if one includes transport tasks. We make the case that traditional industrial sector categories overestimate the true transaction character of an economy. Traditional ‘trade’ sectors employed 13% of the workers in 1807 and 39 percent in 1998, but these figures conceal the fact that all organizations employ jobs which have transformation and transaction tasks. A counterfactual exercise suggests that the growth of the transaction sector share in employment over two centuries was not 200% but 42%. Copyright Springer 2005

Suggested Citation

  • Hendrik Dalen & Aico Vuuren, 2005. "Greasing the Wheels of Trade: A Profile of the Dutch Transaction Sector**," De Economist, Springer, vol. 153(2), pages 139-165, June.
  • Handle: RePEc:kap:decono:v:153:y:2005:i:2:p:139-165
    DOI: 10.1007/s10645-005-2933-4

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    Cited by:

    1. Merkert, Rico, 2010. "Changes in transaction costs over time - The case of franchised train operating firms in Britain," Research in Transportation Economics, Elsevier, vol. 29(1), pages 52-59.
    2. Kuzmin, Evgeny A. & Berdyugina, Oksana N. & Karkh, Dmitri A., 2015. "Conceptual Challenges of Observability for Transaction Sector in Economy," MPRA Paper 66168, University Library of Munich, Germany, revised Jun 2015.

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    labor; trade; transaction costs;


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