heterogeneity across private assets in order to illustrate how a shock to liquidity demand can generate collateral expansion. …This paper develops a model of the public and private provision of liquidity and its relation to unemployment. We … a result, the real interest rate is endogenous and depends on the financing needs of firms, the liquidity needs of OTC …

We study the efficiency of liquidity provision by dealers and the desirability of policy intervention in over … involves bargaining. We model a crisis as a shock that reduces investorsʼ asset demands, lasting until a random recovery time …. In this context, dealers can provide liquidity to investors by accumulating asset inventories. When OTC frictions are …

The goal of this paper is to study how informational frictions affect asset liquidity in OTC markets in a laboratory …

borrowing limits depend on the sophistication of the financial system, the frequency of liquidity shocks, and the rate of return …

We study the dynamics of liquidity provision by dealers during an asset market crash, described as a temporary negative … shock to investors aggregate asset demand. We consider a class of dynamic market settings where dealers can trade …, persistence) under which dealers provide liquidity to investors following the crash. We also characterize the conditions under …