We examine a theoretical model of liquidity with three assets - money, government bonds and equity - that are used for transaction purposes. Money and bonds complement each other in the payment system. The liquidity of equity is derived as an equilibrium outcome. Liquidity cycles arise from the...

In emerging countries, credit market liberalization is often motivated with the financial deepening generated by the entry of foreign financial institutions. However, a gloomier view warns that credit market liberalization can benefit internationally active, export-oriented businesses at the...