Page "Transaction cost" Paragraph 7

The term " transaction cost " is frequently thought to have been coined by Ronald Coase, who used it to develop a theoretical framework for predicting when certain economic tasks would be performed by firms, and when they would be performed on the market.

However, the term is actually absent from his early work up to the 1970s.

While he did not coin the specific term, Coase indeed discussed " costs of using the price mechanism " in his 1937 paper The Nature of the Firm, where he first discusses the concept of transaction costs, and refers to the " Costs of Market Transactions " in his seminal work, The Problem of Social Cost ( 1960 ).

The term " Transaction Costs " itself can instead be traced back to the monetary economics literature of the 1950s, and does not appear to have been consciously ' coined ' by any particular individual.