allows banks in different regions to smooth local liquidity shocks by borrowing and lending on a world interbank market. We … show under which conditions financial integration induces banks to reduce their liquidity holdings and to shift their … portfolios towards more profitable but less liquid investments. Integration helps reallocate liquidity when different banks are …

This paper presents an equilibrium model for the demand and supply of liquidity and its impact on asset prices and … liquidity and large price deviations from fundamentals. Moreover, market forces fail to lead to efficient supply of liquidity … efficiency consequences. For example, lowering the cost of supplying liquidity on the spot (e.g., through direct injection of …

Liquidity production is a central role of banks. We show that, under idealized conditions, high leverage is optimal for … zero weight to the social value of liquidity, it is an inappropriately equity-biased baseline for assessing whether the …

of theory and empirical evidence on gross job flows and on financial and labor market rents, we find that, cumulatively …