Working paper icon

Working paper

Liquidity and Asset Prices.

Abstract:

We show in an exchange economy with liquidity constraints that the volume of trade and asset prices depend on both the supply of liquidity by the Central Bank and on the liquidity of assets and commodities. As a result, monetary aggregates are informative for the assessment of economic developments and the conduct of monetary policy. We also show that the positive correlation between state prices and the future spot rate generates a risk-premium in the term structure of interest rates, even i...

Expand abstract

Actions


Access Document


Files:

Authors


Raphael A. Espinoza More by this author
Dimitrios P. Tsomocos More by this author
Volume:
2008-FE-28
Series:
Financial Economics Working Papers
Publication date:
2008-07-05
URN:
uuid:d923bd45-8d92-4b46-8bab-9c2c92009dc0
Local pid:
oai:economics.ouls.ox.ac.uk:14085
Language:
English

Terms of use


Metrics



If you are the owner of this record, you can report an update to it here: Report update to this record

TO TOP