Intermediary Cost and Coexistence Puzzle

The coexistence puzzle is explained via an interaction between intermediary cost and uncertainty on consumption trade. If the 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 interest-bearing bond.

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Year of publication:	2011
Authors:	Kim, Young Sik ; Lee, Manjong
Institutions:	Institute of Economic Research, Korea University
Subject:	intermediary cost \| interest-bearing asset \| coexistence puzzle

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Extent:	application/pdf
Series:	Discussion Paper Series.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 1103
Classification:	E40 - Money and Interest Rates. General ; E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009132724