Three very different views of the role of transaction costs in computable general equilibrium (CGE) models are presented in these papers. Transaction costs distinguish urban from rural, town from surrounding villages, and even the household from the surrounding world.' In the world of CGE modelers, the costs of trading goods from one domain to another has long been a matter for experimentation, either by explicitly including both domains or by means of closure rules. In either case the exact costs of transacting from one sphere to another are rarely known and these costs are often crucially important for assessing the impact of proposed policies. The papers presented today all take transaction costs seriously. To trade or not to trade, that is the question, at least in L6fgren and Robinson's paper. The beginning point here is de Janvry, Fafchamps, and Sadoulet's corollary of the law of the second best. They examine the consequences of missing markets for household behavior. If there is no market for some inputs (e.g., credit or labor), then the household's response to a price increase for farm output might be quite low: How can one produce more outputs if more inputs are not to be had? The assumption is a missing market, and the consequences of missing one market are then worked out. L6fgren and Robinson take a different tact. There are endogenous transaction costs for the household. Because of these transaction costs, households might decide not to trade, or they might sell labor or agricultural output. The observed lack of trading in markets is seen as an endogenous decision of the household. This gives rise to a very different set of responses: At first, response is as in de Janvry, Fafchamps, and Sadoulet-the household's output does not respond to price increase. But, as price rises high enough to overcome the transaction costs, the price response becomes large. In a nutshell, the observation of missing markets does not doom peasant households to be nonprice responsive. The paper is notable both for its exploitation of new practical software for handling the inequality constraints that come with Kuhn-Tucker conditions and for its economic contribution. When there are transaction costs, the decision to trade is endogenous to the model. Taylor, Yunez-Naude, and Dyer look at a different set of transaction costs-those be-