Intermediary cost and coexistence puzzle

Young Sik Kim, Manjong Lee

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

The coexistence puzzle is explained via an interaction between intermediary cost and uncertainty with regards to consumption trade. If a trade opportunity as a buyer is more likely to arise, ex-ante net return on bond at the margin would be negative up to a certain amount of transactions and, therefore, agents are willing to hold money in the presence of an interest-bearing bond.

Original languageEnglish
Pages (from-to)142-145
Number of pages4
JournalEconomics Letters
Volume117
Issue number1
DOIs
Publication statusPublished - 2012 Oct

Keywords

  • Coexistence puzzle
  • Interest-bearing asset
  • Intermediary cost

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

Fingerprint Dive into the research topics of 'Intermediary cost and coexistence puzzle'. Together they form a unique fingerprint.

  • Cite this