equilibria by self-fulfilling fears of liquidity crises in a monetary union. I also survey the different arguments that have been …

theory of optimum currency areas. We show that the asymmetric shock of the German unification can be seen not only as the …

Traditionally, aggregate liquidity shocks are modelled as exogenous events. Extending our previous work (Cao & Illing …, 2008), this paper analyses the adequate policy response to endogenous systemic liquidity risk. We analyse the feedback … between lender of last resort policy and incentives of private banks, determining the aggregate amount of liquidity available …

this result in a dynamic general equilibrium model where market participants have heterogeneous liquidity needs and where …

In this paper we suggest that Eurozone countries face a policy trade-off among: 1) a common rule imposing co … conclude that the intense fiscal rules that have been introduced in the Eurozone after the emergence of the debt crisis reduced …

liquidity risk, credit risk (financial and sovereign), and interest rate expectations. Our results suggest that liquidity risk … fears. In addition, the ECB appears to have been more effective in addressing liquidity risk since the onset of the crisis …

This paper studies banks' liquidity provision in the Lagos and Wright model of monetary exchanges. With aggregate …