confined to project initiation, I find that: (1) when agents expect a liquidity dry-up on such markets, they optimally choose … to self-insure through the hoarding of non-productive but liquid assets; (2) such a response has negative externalities … as it reduces ex-post market participation, which worsens adverse selection and dries up market liquidity; (3) liquidity …

confined to project initiation, I find that: (1) when agents expect a liquidity dry-up on such markets, they optimally choose … to self-insure through the hoarding of non-productive but liquid assets; (2) such a response has negative externalities … as it reduces ex-post market participation, which worsens adverse selection and dries up market liquidity; (3) liquidity …

liquidity over incentives. Optimal interventions with commitment call for large, long-term subsidies in excess of what is … required to restore liquidity. …

We investigate the channel through which fluctuations in the market liquidity of real-sector repo collateral cause … productive capital as repo collateral to fund the margin for their arbitrage positions. A tiny drop in the market liquidity of …), and can easily incur a simultaneous repo run and arbitrage crashes, where liquidity in several markets dry up altogether …