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Intermediary cost and coexistence puzzle

  • Kim, Young Sik
  • Lee, Manjong
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    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.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0165176512002467
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    Article provided by Elsevier in its journal Economics Letters.

    Volume (Year): 117 (2012)
    Issue (Month): 1 ()
    Pages: 142-145

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    Handle: RePEc:eee:ecolet:v:117:y:2012:i:1:p:142-145
    Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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