We study the transmission of liquidity shocks in a dynamic general equilibrium model where firms and households are … subject to liquidity risk. The provision of liquidity services is undertaken by financial intermediaries that allocate the … stock of liquid asset between the different sectors of the economy. We find that the macroeconomic effects of liquidity …

risk map. The purpose of our study is to advocate two additional dimensions that incorporate liquidity and/or debt capacity … companies face the limited ability to self-resist risk outcomes, due to high debt capacity and high liquidity constraints. We … supports the conclusion that the level of liquidity and debt capacity constraints and thus the ability to retain risk outcomes …