How do macro-financial shocks affect investor behavior and market dynamics? Recent evidence suggests long-lasting effects of personally experienced outcomes on investor beliefs and investment but also significant differences across older and younger generations. We formalize experience-based...

This paper explores the tension between asset quality and liquidity. I model an originator who exerts effort to screen assets, whose cash flows are later sold in secondary markets. Screening improves asset quality, but introduces a problem of asymmetric information that hinders trading of the...

How do macro-financial shocks affect investor behavior and market dynamics? Recent evidence suggests long-lasting effects of personally experienced outcomes on investor beliefs and investment but also significant differences across older and younger generations. We formalize experience-based...