revealed-preference tool to characterize households' valuation of liquidity. A simple dynamic model formalizes the notion that … the prevalence of withdrawals can be used to characterize American households' valuation of liquidity over time and space …. We find pervasive evidence of high valuation of liquidity, hence that shocks are imperfectly insured. Declines in …

compares the Federal Reserve's actions with the literature on optimal policy in a liquidity trap. The theory suggests that, to … securities markets can restore liquidity with fewer government funds than extending credit to the originators of loans …