This paper offers a monetary theory of asset liquidity – one that emphasizes the role of assets in payment arrangements … – and it explores the implications of the theory for the relationship between assets' intrinsic characteristics and … liquidity, and the effects of monetary policy on asset prices and welfare. The environment is a random-matching economy where …

demand for liquid assets is microfounded, and consumers are privately informed about their liquidity needs. As the policy …

the innovations in the VIX index. Aggregate liquidity can be seen as the rate of change of the aggregate balance sheet of …

anomalous. The theory also exhibits rational expectations equilibria with recurring belief driven events that resemble liquidity … prices and standard measures of financial liquidity, such as bid-ask spreads, trade volume, and the incentives of dealers to …. The theory predicts that asset prices carry a speculative premium that reflects the asset's marketability and depends on …

We develop a credit-risk model to study how information acquisition affects the liquidity in a secondary bond market …

Financial markets and financial intermediation may be competing mechanisms in the provision of liquidity insurance and … when there is private information about liquidity shocks and alternative insurance mechanisms. Regions are subject to … idiosyncratic liquidity demand shocks and households are subject to liquidity preference shocks, where both types of shocks are …

assets are likely to serve as media of exchange or collateral (a definition of liquidity often employed in monetary theory …), or that they can be easily sold in a secondary market, if needed (a definition of liquidity closer to the one adopted in … finance)? We develop a model where these two notions of asset liquidity coexist, and their relative importance is determined …