This paper explores liquidity movements in stock and Treasury bond markets over a period of more than 1800 trading days …. Cross-market dynamics in liquidity are documented by estimating a vector autoregressive model for liquidity (that is, bid … in one market affects the spreads in both markets, and that return volatility is an important driver of liquidity …

conditions, i.e. the varying liquidity value ofeligible assets and the associated risk. This induces a liquiditypremium, which …

assume that both the central bank and the private sector face uncertainty about the "correct" model of the economy and have … to learn. A transparent central bank can reduce one source of uncertainty for private agents by communicating its policy …

into a liquidity trap. By contrast, more backward-looking and "active" Taylor rules guarantee that the unique learnable …