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We study economies with multiple assets that are valued both for their return and liquidity. Exchange occurs in decentralized markets with frictions making a medium of exchange essential. Some assets are better suited for this role because they are more liquid - more likely to be accepted in...
Persistent link: https://www.econbiz.de/10005150220
What determines which assets are used in transactions? We develop a framework where the extent to which assets are recognizable determines the extent to which they are acceptable in exchange - i.e., their liquidity. We analyze the effects of monetary policy on asset markets. Recognizability and...
Persistent link: https://www.econbiz.de/10008763762
This working paper was written by Chao Gu (University of Missouri), Guido Menzio (New York University and NBER), Randall Wright (Zhejiang University, University of Wisconsin - Madison and NBER) and Yu Zhu (Bank of Canada).During the financial crisis, relatively centralized markets functioned...
Persistent link: https://www.econbiz.de/10014048619
We study economies with multiple assets that are valued both for their return and liquidity. Exchange occurs in decentralized markets with frictions making a medium of exchange essential. Some assets are better suited for this role because they are more liquid - more likely to be accepted in...
Persistent link: https://www.econbiz.de/10014213763
We study economies with an essential role for liquid assets in transactions. The model can generate multiple stationary equilibria, across which asset prices, market participation, capitalization, output and welfare are positively related. It can also generate a variety of nonstationary...
Persistent link: https://www.econbiz.de/10013135202
Persistent link: https://www.econbiz.de/10013135673
This paper summarizes the papers that were presented at the Liquidity in Frictional Markets conference in November 2008. The papers, which looked at markets for assets as diverse as houses, bank loans, and electronic funds transfer, all explored that amorphous concept called “liquidity” and...
Persistent link: https://www.econbiz.de/10013159586
Persistent link: https://www.econbiz.de/10009349298
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Persistent link: https://www.econbiz.de/10009011916