Rethinking on “the Second North Paradox” and its Solutionalso on the Relation between Two Kinds of Transaction Cost

Through a deeply study on the relationship among transaction cost, institution and economic performance, especially on two kinds of transaction cost, say, “transaction cost of each business” and “aggregate transaction cost of a society”, distinguished by North, we can get the conclusion that the so-called “the second North Paradox” discussed by domestic economists doesn't exist as a paradox in fact. And at the same time, “aggregate transaction cost of a society”is not the simple summation of “transaction cost of each business”. The former prefers “exogenous transaction cost” whereas the latter emphasize particularly on “endocentric transaction cost”.