TY - BOOK ID - 84658531 TI - Monetary transaction costs and the term premium AU - Espinoza, Raphael A. AU - Tsomocos, Dimitrios P. AU - International Monetary Fund. PY - 2013 SN - 1484341325 1484398300 1484371445 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Transaction costs. KW - Externalities (Economics) KW - Cost KW - Right of property KW - Costs, Social KW - External economies and diseconomies KW - External effects (Economics) KW - Social costs KW - Economics KW - Public goods KW - Waste (Economics) KW - Welfare economics KW - Banks and Banking KW - Investments: Commodities KW - Finance: General KW - Macroeconomics KW - Money and Monetary Policy KW - Interest Rates: Determination, Term Structure, and Effects KW - Price Level KW - Inflation KW - Deflation KW - Portfolio Choice KW - Investment Decisions KW - Monetary Policy, Central Banking, and the Supply of Money and Credit: General KW - Commodity Markets KW - Finance KW - Monetary economics KW - Investment & securities KW - Asset prices KW - Liquidity KW - Monetary base KW - Commodities KW - Short term interest rates KW - Prices KW - Money supply KW - Commercial products KW - Interest rates UR - https://www.unicat.be/uniCat?func=search&query=sysid:84658531 AB - We show that, in a monetary equilibrium, trade and asset prices depend on both the supply of the liquidity by the Central Bank and the liquidity of assets and commodities. As a result, monetary aggregates are informative for the conduct of monetary policy. We also show asset prices are higher in liquidity-constrained states of nature. This generates a term premium even in absence of aggregate uncertainty. These results hold in any monetary economy with heterogeneous agents and short-term liquidity effects, where monetary costs act as transaction costs and the quantity theory of money is verified. ER -