This paper studies banks' liquidity provision in the Lagos and Wright model of monetary exchanges. With aggregate …

reserves (a liquidity crisis) occurs endogenously. We show that discount window lending by the LLR is welfare-improving but … reduces banks' ex-ante incentive to hold monetary reserves, which increases the probability of a liquidity crisis, and can …

In the presence of macroeconomic shocks severe enough to threaten the liquidity or solvency of the banking system, the …

lending rate, liquidity requirements and constructive ambiguity. …

This paper introduces agent heterogeneity, liquidity, and endogenous default to a DSGE framework. Our model allows for … the economy. Due to liquidity and endogenous default, the transmission mechanism of shocks is well defined, and their …

Traditionally, aggregate liquidity shocks are modelled as exogenous events. Extending our previous work (Cao & Illing …, 2008), this paper analyses the adequate policy response to endogenous systemic liquidity risk. We analyse the feedback … between lender of last resort policy and incentives of private banks, determining the aggregate amount of liquidity available …

Do digital payment technologies generate liquidity premia like cash and Treasury? We provide an estimate in the context … demand system that models funds as imperfect substitutes, this size increase maps to a liquidity premium of about 0.8% per …