Trading Fees and Slow-Moving Capital

Preprint OPEN
Buss, Adrian; Dumas, Bernard J;
(2015)
  • Subject: frictions; general equilibrium; slow-moving capital; Trading fees
    • jel: jel:G11 | jel:G12

In some situations, investment capital seems to move slowly towards profitable trades. We develop a model of a financial market in which capital moves slowly simply because there is a proportional cost to moving capital. We incorporate trading fees in an infinite-horizo... View more
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