Economics with Market Liquidity Risk

Viral V. Acharya, Lasse Heje Pedersen*

*Corresponding author af dette arbejde

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Abstrakt

For markets to work efficiently, buyers and sellers must be able to transact easily. People must have access to a marketplace such as a supermarket or a stock exchange with adequate liquidity. Further, people must have confidence that such a well-functioning marketplace will also exist in the future. Market liquidity risk is the risk that the market will function poorly in the future, handcuffing the “invisible hand” through which markets produce allocative efficiency. We discuss the effects of market liquidity risk on asset pricing, investment management, corporate finance, banking, financial crises, macroeconomics, monetary policy, fiscal policy, and other economic areas.
OriginalsprogEngelsk
TidsskriftCritical Finance Review
Vol/bind8
Udgave nummer1-2
Sider (fra-til)111-125
Antal sider15
ISSN2164-5744
DOI
StatusUdgivet - 17 dec. 2019

Bibliografisk note

Epub ahead of print. Published online: December 17, 2019

Emneord

  • Asset pricing
  • Corporate finance
  • Crisis
  • Liquidity risk
  • Macroeconomics
  • Monetary policy

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