Economics at your fingertips  

International Liquidity Rents

Maya Eden ()

Review of Economic Dynamics, 2019, vol. 31, 147-159

Abstract: This paper proposes a simple two-country model for studying the macroeconomic implications of a shock to the liquidity of capital. In addition to its standard role as an input of production, physical capital provides some liquidity services, which act as a subsidy for investment. I consider the implications of a shock to the liquidity services from capital, calibrated to match the 2008 recession in the United States. A calibration suggests that the model can quantitatively account for the behavior of various macroeconomic aggregates during the crisis. As the US economy is an exporter of liquidity services, the increase in the liquidity premium has a moderating effect. (Copyright: Elsevier)

Keywords: Liquidity creation; 2008 recession (search for similar items in EconPapers)
JEL-codes: E44 F30 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Access to full texts is restricted to ScienceDirect subscribers and institutional members. See for details.

Related works:
Working Paper: International liquidity rents (2013) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
https://www.economic ... ription-information/

DOI: 10.1016/

Access Statistics for this article

Review of Economic Dynamics is currently edited by Jonathan Heathcote and Vincenzo Quadrini

More articles in Review of Economic Dynamics from Elsevier for the Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().

Page updated 2019-10-14
Handle: RePEc:red:issued:18-198