price, thereby causing the run itself. Consequently, stock prices are low and risk is allocated inefficiently. Liquidity … runs and crises are not caused by liquidity shocks per se, but by the fear of future liquidity shocks …

riskless rate. We embed this mechanism in a simple production economy with liquidity constraints and use observable macro data … recurring. As a result, even transitory shocks have persistent effects because, once observed, the shock stays forever in the …

Using the September 15, 2008 bankruptcy of Lehman Brothers as an exogenous shock to funding costs, we show that hedge … funds act as liquidity providers. Hedge funds using Lehman as prime broker could not trade after the bankruptcy, and these …-connected hedge funds in turn experienced greater declines in market liquidity following the bankruptcy than other stocks; and, the …

I describe two amplifications mechanisms that operate during liquidity crises and discuss the scope for central bank … balance sheets. A negative shock to the balance sheets of asset-holders causes them to liquidate assets, lowering prices … disengage from markets and increase their demand for liquidity. This behavior leads to a loss of liquidity and a crisis …

countries with an alternative form of liquidity management against foreign shocks when traditional reserves are committed to …

finds that common shocks - key crisis events as well as changes to global liquidity and risk - have exerted a large effect …

In the two decades straddling China's WTO accession, the China Shock, i.e. the rapid trade integration of China in the … about the extent of China Shock's repercussions in their district at the time when they voted on China's Normal Trade … could predict the initial China Shock in the early 1990's, but not around 2000, when China started entering new sectors, and …

In this paper, we develop an equilibrium model for stock market liquidity and its impact on asset prices when constant … prevents them from synchronizing their trades and hence gives rise to endogenous order imbalances and the need for liquidity …. Moreover, the endogenous liquidity need, when it occurs, is characterized by excessive selling of significant magnitudes. Such …