The New Wave of Liquidity: Impact of Friction

Shahin Shojai and Samuel Wang ()
Additional contact information
Samuel Wang: Citigroup, Postal: 425 Park Avenue, New York, NY 10043,, http://www.citi.com

Journal of Financial Transformation, 2005, vol. 14, 51-59

Abstract: On the fourth anniversary of the original paper by Shojai and Hahn we will look at whether any of the predictions made in that article have come true. The authors suggested that revolutionary technologies, such as the Internet and wireless devices, would over time make it possible to derive value from previously less liquid or even unrecognized assets, and that the aggregate effect of such value liberation would be "a new wave of liquidity, which will engulf the global economy and result in substantial increases in liquidity around the world." They further suggested that for this value liberation to take place, each of these previously illiquid, and in certain circumstances even unrecognized, assets would need to go through a four-step process: reduction in friction, value release, asset pricing, and asset recognition. We find in this paper that while a number of these predictions have come true, the degree of transformation that was envisioned in the original article are still far from becoming a reality.

Keywords: New sources of liquidity; New models of capital creation; market frictions; auction models; asset pricing; asset recognition (search for similar items in EconPapers)
JEL-codes: D23 D24 D44 D52 D81 D84 G12 (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations:

Downloads: (external link)
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=798248 Full text (application/pdf)

Related works:
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: https://EconPapers.repec.org/RePEc:ris:jofitr:0009

Access Statistics for this article

Journal of Financial Transformation is currently edited by Prof. Shahin Shojai

More articles in Journal of Financial Transformation from Capco Institute 77 Water Street, 10th Floor, New York NY 10005.
Bibliographic data for series maintained by Prof. Shahin Shojai ( this e-mail address is bad, please contact ).