Although exchange represents of basic activity in markets, we need to break the theory of exchange down into component parts in order to understand it fully — also to begin to understand the critical role that money plays in exchanges.
I tried to emphasize the importance of economic exchange in the section on Economic Reasoning. In this section I will flesh out some of the details of the theory of exchange. I have chosen to put this description in the Money & Banking section because most exchanges in the modern world are conducted using money.
This discussion will follow these topics:
Voluntary Exchange: Exchange without coercion or intervention.
Direct Exchange: Exchange of one item for another.
Indirect Exchange: Exchange for an item to use in a second exchange.
Money: Exchange using a common medium of indirect exchange.
In order to maintain continuity in the structure and navigation of the site we have posted a number of pages in a draft or summary format. We are working on the final edition and will post it as soon as possible.