ABSTRACT
The coordination of economic activity can take place because institutions create a setting in which exchange can take place, and because people are able to obtain information about the economic activity of others, largely as a result of the same institutions that facilitate exchange. In the most basic exchanges, where one good is simultaneously bartered for another, little in the way of economic institutions is required to facilitate the exchange. Complicate the exchange only a little by having a good being purchased with money and a complex set of monetary institutions come into play. If the money is a full-bodied money, like a gold coin, monetary institutions can be relatively simple, but the institutional requirements grow tremendously if the transaction takes place with a check or a credit card.
