Liquidity Constraints
نویسندگان
چکیده
We study economies where some assets play an essential role to nance consumption opportunities but payment arrangements are subject to a moral hazard problem. Agents can produce fraudulent assets at a positive cost, which generates an endogenous upper bound on the quantity of assets that can be exchanged for goods and services. This endogenous liquidity constraint depends on the characteristics of the assets, trading frictions, and policy. Our model o¤ers insights for asset prices and liquidity premia, the value of currency, the rate of return dominance, and the working of monetary policy. J.E.L. Classi cation: D82, D83, E40, E50
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