standard Diamond-Dybvig agent in the sense that they are uncertain about their liquidity needs at the time they deposit their … endowments in banks. Foreign agents, on the other hand, know their liquidity preference at the time they are born. This paper …-term capital flows in, a moral hazard problem emerges, where foreigners exploit the bank's service of liquidity provision at the …

in a liquid storage technology or in a partially illiquid Cobb Douglas technology. By pooling liquidity risk, banks play …How do the liquidity functions of banks affect investment and growth at different stages of economic development? How … issues using an overlapping generations growth model where agents, who experience idiosyncratic liquidity shocks, can invest …

Decision theorists claim that an ordinal measure of risk may be sufficient for an agent to make a rational choice under … uncertainty. We propose a measure of financial risk, namely the Varying Cross-sectional Risk (VCR), that is based on a ranking of … mean trading returns and accurate estimation of the Value-at-Risk. …