Intermediary cost and coexistence puzzle

Young Sik Kim, Manjong Lee

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)


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.

Original languageEnglish
Pages (from-to)142-145
Number of pages4
JournalEconomics Letters
Issue number1
Publication statusPublished - 2012 Oct

Bibliographical note

Funding Information:
We are grateful to an anonymous referee for the valuable comments and suggestions. Manjong Lee acknowledges the financial support from the National Research Foundation of Korea ( NRF-2011-330-B00055 ). The usual disclaimer applies.


  • Coexistence puzzle
  • Interest-bearing asset
  • Intermediary cost

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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