compares the Federal Reserve's actions with the literature on optimal policy in a liquidity trap. The theory suggests that, to … securities markets can restore liquidity with fewer government funds than extending credit to the originators of loans …

liquidity shocks, the liquidation price they can get will be lower when buyers know that they have more information on … expectation of future liquidity problems export relatively more FPI than FDI, and (2) this effect strengthens as the source … source countries from 1985 to 2004. Our key variable is the predicted severity of liquidity shock, as proxied by episodes of …

"We propose a broad measure of liquidity for the overall financial market by exploiting its connection with the amount … more "noise.'' As such, noise in the Treasury market can be informative and we expect this information about liquidity to … - high liquidity and low credit risk. Indeed, we find that our "noise'' measure captures episodes of liquidity crises of …