The Liquidity Premium of Near-Money Assets

  title={The Liquidity Premium of Near-Money Assets},
  author={Stefan Nagel},
Near-money assets are money substitutes for storing liquidity. As a consequence, the liquidity premium of near-money assets is tied to the opportunity cost of holding money. When money does not bear interest, this opportunity cost is given by the level of short-term interest rates. The time-series behavior of liquidity premia of T-bills and other near-money assets in the US, Canada, and the UK since the 1970s is consistent with this prediction. In the US, for example, the spread between… CONTINUE READING
Highly Cited
This paper has 29 citations. REVIEW CITATIONS

10 Figures & Tables



Citations per Year

Citation Velocity: 6

Averaging 6 citations per year over the last 3 years.

Learn more about how we calculate this metric in our FAQ.