Shoeleather cost
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Shoeleather cost is the cost of inflation from reducing real money balances, such as the inconvenience of needing to make more frequent trips to the bank. Small open economy]]. An open economy that takes its interest rate as given by world financial markets; an economy that, by virtue of its size, has a negligible impact on world markets and, in particular, on the world interest rate. (Cf. large open economy.)
Definition
According to Macroeconomics by Mankiw (7th edition),
- Shoeleather cost. The cost of inflation from reducing real money balances, such as the inconvenience of needing to make more frequent trips to the bank. Small open economy]]. An open economy that takes its interest rate as given by world financial markets; an economy that, by virtue of its size, has a negligible impact on world markets and, in particular, on the world interest rate. (Cf. large open economy.)
