The effect of transaction costs on economic development

The article analyzes the impact of transaction costs on economic development. Calculations made on the basis of one of the methodologies prove that the transaction costs of each country's economy have their own specific features and these diversity, reflecting the distinctive configuration of institutions in each country, require a new approach to the structure and calculation of GDP. Considering the above, on the basis of the existing methodology, transaction costs for the Republic of Azerbaijan were analyzed, certain conclusions were made about the nature of its economic development, and some proposals were put forward.