borrowing constraints. In a departure from previous models, the theory shows that liquidity constraints imply a distinctive … intertemporal relationship between durable and nondurable good~ consumption. The presence of binding, liquidity constraints are …. When liquidity constraints are binding, the error correction term will have predictive power for the future change in …

This paper surveys the theory on zombie lending incentives and the consequences of zombie lending for the real economy …

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 …

We study liquidity conditions in the corporate bond market during the COVID-19 pandemic, and the effects of the … unprecedented interventions by the Federal Reserve. We find that, at the height of the crisis, liquidity conditions deteriorated … "lean against the wind" and bid-ask spreads declined. To study the causal impact of the interventions on market liquidity …

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 …