Financial markets with endogenous transaction costs
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- Martins-da-Rocha, V.F. & Vailakis, Y. Econ Theory (2010) 45: 65. doi:10.1007/s00199-009-0498-1
The paper proposes an alternative general equilibrium formulation of financial asset economies with transaction costs. Transaction costs emerge endogenously at equilibrium and reflect agents’ decisions of intermediating financial activities at the expense of providing labor services.