Why don't people just hold bonds and sell their bonds when they need money? One reason is that there is a cost of converting one asset into the other asset. Economists often call these costs "shoe leather costs". It costs money to convert your wealth from one type of asset into the other.
Shoe Leather Costs - Key Concept
Why don't people just hold bonds and sell their bonds when they need money? One reason is that there is a cost of converting one asset into the other asset.
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