A Model of Monetary Exchange in Over-the-Counter Markets
Shengxing Zhang () and
No 1242, 2013 Meeting Papers from Society for Economic Dynamics
We develop a model of monetary exchange in over-the-counter (OTC) markets and use it to study the effects of inflation on asset prices, as well as on standard measures of financial liquidity, such as the size of bid-ask spreads, trade volume, and the incentives of dealers to supply immediacy, both by choosing to participate in the market-making activity, and by holding asset inventories on their own account.
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed013:1242
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