TY - JOUR
T1 - Liquidity
T2 - A new monetarist perspective
AU - Lagos, Ricardo
AU - Rocheteau, Guillaume
AU - Wright, Randall
PY - 2017/6
Y1 - 2017/6
N2 - This essay surveys the new monetarist approach to liquidity. Work in this literature strives for empirical and policy relevance, plus rigorous foundations. Questions include: What is liquidity? Is money essential in achieving desirable outcomes? Which objects can or should serve in this capacity? When can asset prices differ from fundamentals? What are the functions of commitment and collateral in credit markets? How does money interact with credit and intermediation? What can and should monetary policy do? The research summarized emphasizes the micro structure of frictional transactions, and studies how institutions like monetary exchange, credit arrangements, or intermediation facilitate the exchange process.
AB - This essay surveys the new monetarist approach to liquidity. Work in this literature strives for empirical and policy relevance, plus rigorous foundations. Questions include: What is liquidity? Is money essential in achieving desirable outcomes? Which objects can or should serve in this capacity? When can asset prices differ from fundamentals? What are the functions of commitment and collateral in credit markets? How does money interact with credit and intermediation? What can and should monetary policy do? The research summarized emphasizes the micro structure of frictional transactions, and studies how institutions like monetary exchange, credit arrangements, or intermediation facilitate the exchange process.
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U2 - 10.1257/jel.20141195
DO - 10.1257/jel.20141195
M3 - Review article
AN - SCOPUS:85008682806
SN - 0022-0515
VL - 55
SP - 371
EP - 440
JO - Journal of Economic Literature
JF - Journal of Economic Literature
IS - 2
ER -