Liquidity, Business Cycles, and Monetary Policy

By Nobuhiro Kiyotaki, John. Moore. Journal of Political Economy, 2001

287 citations recorded by the source corpus.

This paper presents a model of a monetary economy where there are differences in liquidity across assets. Money circulates because it is more liquid than other assets, not because it has any special function. The model is used to investigate how aggregate activity and asset prices fluctuate with shocks to productivity and liquidity and to examine what role government policy might have through open-market operations that change the mix of assets held by the private sector.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/66d4b93ca47fd82164c738371b86fa6be914a4fe

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In Economics and Econometrics

Citations in the corpus

On the equivalence of private and public money (2019, background): “9 In Kiyotaki & Moore (2012), money coexists with other ﬁnancial assets and physical capital both of which have limited market liquidity that is, they may only slowly be sold; this restriction can be captured by an additional L ht -constraint.”
Monetary Policy and Bank Profitability in a Low Interest Rate Environment (2018, unknown): “This is because such measures provide abundant access to central bank liquidity and lower the cost of debt with positive consequences for bank funding and borrower creditworthiness respectively, thereby supporting bank capital and reducing non-performing loans and loan loss provisioning (Bernanke an”