to relax a liquidity constraint. The dual nature of equity in the search-and-matching market entails a strategic … complementary in search operating through buyers' liquidity constraint, and it gives rise to endogenous booms and busts. The economy …

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 …

set of assets can be partitioned into three liquidity tiers, which differ in their resalability, their prices, their … a pecuniary externality, which leads to the result that some policies commonly thought to improve liquidity can be … welfare reducing. (Note: A previous version of this paper was circulated under the title “Liquidity Constraints.”) …

Is asset liquidity a source of price volatility? We answer this question within a continuous-time, New Monetarist … economy under extrinsic uncertainty and endogenous asset liquidity. We consider single or multiple assets, risk-free or risky … equilibria exist only if assets have a non-positive intrinsic value (e.g., fiat monies) or if their liquidity (acceptability …

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

This paper develops a theory of endogenously (non-)Ricardian beliefs. That is, whether Ricardian Equivalence holds in ….) multiple equilibria exist where the economy can coordinate on Ricardian or non-Ricardian equilibria. The theory suggests a …

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 …-traders, and the public supply of liquidity. We show that under some conditions the policymaker faces a trade-off between the …