Conceptual Challenges of Observability for Transaction Sector in Economy

Evgeny Kuzmin, Oksana N. Berdyugina and Dmitri A. Karkh

MPRA Paper from University Library of Munich, Germany

Abstract: Stimuli for the sustainable economic development are mainly kept owing to a balanced sectoral structure. An ideal ratio between the transformation (production) and transaction components helps to smooth shocks from crises of institutional reforms. A nature of institutional reforms has led to a conclusion of an evolutionary expansion both in terms of a number of institutions themselves (horizontal supplement), and the complexity in elaborating rules and regulations for the proper behaviour (vertical supplement). These and other causes logically lead to strengthening in the transaction sector. In terms of a missing conventional agreement on an evaluation of the transaction sector in economy, the paper has presented a review and the authors have systematized some typical errors and inconsistencies in approaches. In opposition to the "cost-based" evaluation method by J. Wallis and D. North, the authors have presented an available alternative method to measure the value of the transaction sector using "cost" parameters. The research has shown the efficiency of the used "cost" approach to the evaluation that eliminates significant errors in the recalculation of the volume of the transaction sector in the economy.

Keywords: Transaction costs; transaction sector; institutional reforms; sectoral structure of economy (search for similar items in EconPapers)
JEL-codes: B25 O17 O41 (search for similar items in EconPapers)
Date: 2015-01, Revised 2015-06
New Economics Papers: this item is included in nep-ger
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Citations: View citations in EconPapers (1)

Forthcoming in Mediterranean Journal of Social Sciences 4 S3.6(2015): pp. 391-402

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