overshooting and a reduced liquidation value for the distressed trader. Hence, the market is illiquid when liquidity is most needed …

himself trapped and forced to remain in that position because of a lack of liquidity. What are the asset-pricing implications …

This paper proposes a theory of corporate liquidity demand and provides new evidence on corporate cash policies. Firms … specification. We also find weak evidence consistent with our agency-based model of corporate liquidity …

This paper studies a model where money is valued for the liquidity services it provides in the future. These liquidity … services cannot be provided by any other asset. Changes in expectations of the value of future liquidity services affect the …. Furthermore, shifts between money and other assets that are driven by precautionary liquidity demand make nominal interest rates …

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 …

The paper proposes a new measure, VNET, of market liquidity which directly measures the depth of the market. The … over time high volumes are associated with an influx of informed traders and reduce market liquidity. High expected …