Capital reallocation and liquidity with search frictions

Research output: Contribution to journalArticle

Abstract

I construct a model of an asset market subject to search frictions, in an environment where both investment and asset liquidity are determined endogenously. This provides a natural framework to analyze the interaction between capital reallocation and liquidity in response to aggregate shocks, which I assess quantitatively. The search model of capital reallocation exhibits strong internal propagation, and can generate substantial changes in factor utilization following aggregate shocks.

Original languageEnglish
Pages (from-to)1-29
Number of pages29
JournalJournal of Economic Theory and Econometrics
Volume23
Issue number1
Publication statusPublished - 2012 Mar 1

Fingerprint

Search frictions
Liquidity
Capital reallocation
Factors
Interaction
Assets
Asset markets
Propagation

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Cite this

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title = "Capital reallocation and liquidity with search frictions",
abstract = "I construct a model of an asset market subject to search frictions, in an environment where both investment and asset liquidity are determined endogenously. This provides a natural framework to analyze the interaction between capital reallocation and liquidity in response to aggregate shocks, which I assess quantitatively. The search model of capital reallocation exhibits strong internal propagation, and can generate substantial changes in factor utilization following aggregate shocks.",
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Capital reallocation and liquidity with search frictions. / Kim, Yong Jin.

In: Journal of Economic Theory and Econometrics, Vol. 23, No. 1, 01.03.2012, p. 1-29.

Research output: Contribution to journalArticle

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