Transaction Costs and Institutions
This paper proposes a simple framework for understanding endogenous transaction costs - their composition, size and implications. In a model of diversification against risk, we distinguish between investments in institutions that facilitate exchange and the costs of conducting exchange itself. Institutional quality and market size are determined by the decisions of risk averse agents and conditions are discussed under which the efficient allocation may be decentralized. We highlight a number of differences with models where transaction costs are exogenous, including the implications for taxation and measurement issues.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.sire.ac.uk
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robert M. Townsend & Kenichi Ueda, 2003.
"Financial Deepening, Inequality, and Growth; A Model-Based Quantitative Evaluation,"
IMF Working Papers
03/193, International Monetary Fund.
- Robert M. Townsend & Kenichi Ueda, 2006. "Financial Deepening, Inequality, and Growth: A Model-Based Quantitative Evaluation -super-1," Review of Economic Studies, Oxford University Press, vol. 73(1), pages 251-293.
- Rossi-Hansberg, Esteban & Antras, Pol, 2009.
"Organizations and Trade,"
3199064, Harvard University Department of Economics.
- Daron Acemoglu & Pol Antràs & Elhanan Helpman, 2007.
"Contracts and Technology Adoption,"
American Economic Review,
American Economic Association, vol. 97(3), pages 916-943, June.
- Martins-da-Rocha, Victor Filipe & Vailakis, Yiannis, 2008.
"Endogenous Transaction Costs,"
Economics Working Papers (Ensaios Economicos da EPGE)
680, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
- Andrei A. Levchenko, 2004.
"Institutional Quality and International Trade,"
IMF Working Papers
04/231, International Monetary Fund.
- Greenwood, Jeremy & Jovanovic, Boyan, 1988.
"Financial Development, Growth, And The Distribution Of Income,"
88-12, C.V. Starr Center for Applied Economics, New York University.
- Greenwood, Jeremy & Jovanovic, Boyan, 1990. "Financial Development, Growth, and the Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1076-1107, October.
- Greenwood, J. & Jovanovic, B., 1988. "Financial Development, Growth, And The Distribution Of Income," RCER Working Papers 131, University of Rochester - Center for Economic Research (RCER).
- Jeremy Greenwood & Boyan Jovanovic, 1989. "Financial Development, Growth, and the Distribution of Income," NBER Working Papers 3189, National Bureau of Economic Research, Inc.
- Greenwood, J. & Jovanovic, B., 1990. "Financial Development, Growth, And The Distribution Of Income," University of Western Ontario, The Centre for the Study of International Economic Relations Working Papers 9002, University of Western Ontario, The Centre for the Study of International Economic Relations.
When requesting a correction, please mention this item's handle: RePEc:edn:sirdps:253. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gina Reddie)
If references are entirely missing, you can add them using this form.