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The Economics of Grants and Exchange: The Transactions Matrix

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  • Alan A. Brown
  • Janos Horvath
  • Egon Neuberger

Abstract

The paper presents some theoretical aspects of grants and exchange economics by means of a Transactions Matrix. This Matrix provides a more comprehensive classification of all types of grant and exchange transactions. The construction of the Matrix led to the identification of a new category, the implicit exchange economy. The identification of this category leads to the consideration of sub***stituting a type of market model for the command model in analyzing intra-organizational behavior. The paper considers the complex issue of identifying the size, efficiency and welfare implications of implicit grants. It suggests that Abram Bergson's Adjusted Factor Cost Standard be used to measure the size of the implicit grants economy in both planned and market economies, as a complement to the use of world market prices.

Suggested Citation

  • Alan A. Brown & Janos Horvath & Egon Neuberger, 1998. "The Economics of Grants and Exchange: The Transactions Matrix," The American Economist, Sage Publications, vol. 42(2), pages 19-33, October.
    • Handle: RePEc:sae:amerec:v:42:y:1998:i:2:p:19-33
    DOI: 10.1177/056943459804200202
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    References listed on IDEAS

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    1. Telser, L G, 1980. "A Theory of Self-enforcing Agreements," The Journal of Business, University of Chicago Press, vol. 53(1), pages 27-44, January.
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