Cui, Wei; Radde, Sören - DIW Berlin (Deutsches Institut für Wirtschaftsforschung) - 2014
We endogenize asset liquidity in a dynamic general equilibrium model with search frictions on asset markets. In the … model, asset liquidity is tantamount to the ease of issuance and resaleability of private financial claims, which is driven … assets, such as government bonds or fiat money, to ease funding constraints. We show that liquidity and asset prices …