Intermediary Cost and Coexistence Puzzle

Young Sik Kim () and Manjong Lee

Working Paper Series from Institute of Economic Research, Seoul National University

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 transaction 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: 2012-05
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: 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:snu:ioerwp:no84

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