Intermediary cost and coexistence puzzle

Young Sik Kim and Manjong Lee

Economics Letters, 2012, vol. 117, issue 1, 142-145

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.

Keywords: Intermediary cost; Interest-bearing asset; Coexistence puzzle (search for similar items in EconPapers)
JEL-codes: E40 E42 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Intermediary Cost and Coexistence Puzzle (2012)
Working Paper: Intermediary Cost and Coexistence Puzzle (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:117:y:2012:i:1:p:142-145

DOI: 10.1016/j.econlet.2012.04.103

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