Response to Peer Comments - Essay Example

Transactions Transactions Response to Characteristics that Make Transactions Possible The two characteristics you have d resonate well with most people’s views on the characteristics of a transaction. Therefore, I agree with you that one characteristic - and perhaps the most basic - of a transaction is a situation whereby two or more people come together to manage or conduct business, which is the most important characteristic in my opinion since it is the foundation of a transaction. I also agree with you that a trading agreement is another characteristic that makes transactions possible.

However to add to your argument, a trading agreement forms a basis on how the parties in the transaction will engage, which underlines its importance. The Office of the Federal Register (2011) supports my view by noting that, a trading agreement specifies “the duties and responsibilities of each party to the agreement in conducting a standard transaction” (p. 811).Response to the Role Played By Institutions in Transactions I agree with you that economic institutions define the environment in which transactions occur.

I also concur with you on the importance of the law as the institution that enables transactions to take place, which has multifaceted effects since it can limit and/or expand our opportunities. Hence, I agree with you that there will be less return on investment without the institution of law since it acts as a deterrent to criminal elements. I concur with you that economic institutions are important to spur economic growth since they influence many sectors of the economy. However to add to you argument, I also think that political institutions play a significant role in economic growth.

To put this into perspective, kindly allow me to use the case of the two Koreas, which were one country. After the two countries split, the North became a dictatorship while the South became a democratic nation. In effect, South Korea’s democratic political institutions were instrumental in the country’s economic growth, in comparison to the North (Glaeser, Porta, Silanes, &Shleifer, 2004, p. 273). Hence, this agrees with your notion that different institutions have a relationship with different degrees of efficiency, potential for economic growth, and the different distribution of the gains across different individuals and social groups.

ReferencesGlaeser, E. L., Porta, R. L., Silanes, F. L. D., & Shleifer, A. (2004). Do Institutions Cause Growth? Journal of Economic Growth, 9(3), 271-303. Retrieved from http://www.jstor.org/stable/40215873Office of the Federal Register (U.S.). (2011). Code of Federal Regulations, Title 45, Public Welfare, PT. 1-199, Revised as of October 1, 2011. Washington, DC: Government Printing Office.