Of Contracts and the Katallaxy: Measuring the Extent of the Market, 1919-1939

Cochran, Jay. "Of Contracts and the Katallaxy: Measuring the Extent of the Market, 1919-1939," Review of Austrian Economics 17, no. 4(2004): 407-446.

This paper develops a view of the extent of the market based on the katallactic notions advanced by Mises, Hayek, Buchanan, and others. This contractarian approach to the katallactic process is used to analyze one of the most studied but still controversial periods of U.S. economic history, the interwar years from 1919 to 1939. The pictures that emerge from a katallactic analysis of the interwar years are quite different from those that emerge, for example, from considerations of national income and product. The katallactic approach reveals, for example, that a much larger and more dynamic structure of production and financial exchanges sits behind the relatively sanguine façade of final consumption during this turbulent period.