Shoe_leather_cost
Shoe leather cost
Opportunity cost of avoiding holding cash on hand
Metaphorically, shoe leather cost is the cost of time and effort (or opportunity costs of time and effort) that people expend by holding less cash in order to reduce the inflation tax that they pay on cash holdings when there is high inflation. These costs include, having to make additional trips to the bank, not being able to make change, or not being able to make unexpected purchases.[1] The term comes from the fact that more walking is required (historically, although the rise of the Internet has reduced it) to go to the bank and get cash and spend it, thus wearing out shoes more quickly.[1] A significant cost of reducing money holdings is the additional time and convenience that must be sacrificed to keep less money on hand than would be required if there were less or no inflation.