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Endogenous Transaction Costs

Author

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  • V. Filipe MARTINS-DA-ROCHA
  • YIANNIS VAILAKIS

    (Department of Economics, University of Exeter)

Abstract

The paper proposes an alternative general equilibrium formulation of financial asset economies with transactions costs. Transaction costs emerge endogenously at equilibrium and reflect agents decisions of intermediating financial activities at the expense of providing labor services. An equilibrium is shown to exist in the case of real asset structures.

Suggested Citation

  • V. Filipe MARTINS-DA-ROCHA & YIANNIS VAILAKIS, 2008. "Endogenous Transaction Costs," Discussion Papers 0810, Exeter University, Department of Economics.
  • Handle: RePEc:exe:wpaper:0810
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    File URL: http://people.exeter.ac.uk/cc371/RePEc/dpapers/DP0810.pdf
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    References listed on IDEAS

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    Cited by:

    1. António Antunes & Tiago Cavalcanti & Anne Villamil, 2010. "Intermediation Costs and Welfare," Centre for Growth and Business Cycle Research Discussion Paper Series 142, Economics, The Univeristy of Manchester.
    2. Stefan Gruber & Luigi Marattin, 2010. "Taxation, infrastructure and endogenous trade costs in new economic geography," Papers in Regional Science, Wiley Blackwell, vol. 89(1), pages 203-222, March.
    3. Redding, Stephen, 2009. "Economic geography: a review of the theoretical and empirical literature," LSE Research Online Documents on Economics 25500, London School of Economics and Political Science, LSE Library.
    4. Charles Nolan & Alex Trew, 2011. "Transaction costs and institutions," Working Papers 2011_14, Business School - Economics, University of Glasgow.
    5. V. Martins-da-Rocha & Yiannis Vailakis, 2010. "Financial markets with endogenous transaction costs," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 45(1), pages 65-97, October.

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