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Liquidity in Frictional Asset Markets
Author(s) -
ROCHETEAU GUILLAUME,
WEILL PIERREOLIVIER
Publication year - 2011
Publication title -
journal of money, credit and banking
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.763
H-Index - 108
eISSN - 1538-4616
pISSN - 0022-2879
DOI - 10.1111/j.1538-4616.2011.00435.x
Subject(s) - market liquidity , asset (computer security) , context (archaeology) , inflation (cosmology) , monetary policy , economics , payment , monetary economics , business , financial economics , financial system , finance , computer science , paleontology , physics , computer security , theoretical physics , biology
On November 14–15, 2008, the Federal Reserve Bank of Cleveland hosted a conference on “Liquidity in frictional asset markets.” In this paper, we review the literature on asset markets with trading frictions in both finance and monetary theory using a simple search‐theoretic model, and we discuss the papers presented at the conference in the context of this literature. We will show the diversity of topics covered in this literature, for example, the dynamics of housing and credit markets, the functioning of payment systems, optimal monetary policy and the cost of inflation, the role of banks, the effect of informational frictions on asset trading.