Social transaction costs and economic growth

Transaction costs have become a major topic of research in the last decades. However; there is still a great shortage of empirical approaches to their effects on the economic performance. A short review of these empirical studies indicates that the impact of transaction costs on economic growth is a controversially discussed topic. Based on the method proposed by Reichhardt (1995), the volume of transaction activities in West Germany between 1982 and 1993 is estimated. The analyses show that their relative weight has continuously risen. This development is caused by a growing importance of transaction activities in all branches as well as a relatively faster growth of those branches where the share of transaction activities is especially high. Simultaneously, the productivity of transaction as well as transformation activities has increased steadily. A significant difference between the growth rates in productivity was not found. Hence there is no evidence that the observed increase in transaction activities is a limiting factor for economic growth.