Economics, Econometrics and Finance
8 years ago

Transaction Costs Shape Market Efficiency More Than Previously Thought

General Equilibrium Models, Transaction Costs, and the Concept of Efficient Allocation in a Capitalist Economy
G. Furubotn

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The article explores how transaction costs and economic institutions impact market efficiency in capitalist economies. Traditional views suggest that market capitalism is the most efficient system, but recent research shows that transaction costs and institutions play a significant role in market outcomes. This challenges the idea that market capitalism is always the best option for achieving economic efficiency.