Battalio, Robert; Mehran, Hamid; Schultz, Paul - Federal Reserve Bank of New York - 2011
stock prices, but significantly increased costs of liquidity. In August 2011, the U.S. market experienced a large decline … recent stock market declines. Furthermore, banning short selling does not appear to prevent stock prices from falling when … when Standard and Poor’s announced a downgrade of U.S. debt. Our cross-sectional tests suggest that the decline in stock …