Inventories and price changes are correlated. The inverse relation is most obvious in housing whereinventories build in low demand markets and shrink in high demand markets. This is a puzzle. Ifsellers and buyers had symmetric views of the world, one would think that sellers would lower...

This paper makes three contributions to our understanding of the price discovery process in currencymarkets. First, it provides evidence that this process cannot be the familiar one based on adverse selectionand customer spreads, since such spreads are inversely related to a trade’s likely...