Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/159766
Authors: 
Chiesa, Gabriella
Year of Publication: 
2014
Series/Report no.: 
Quaderni - Working Paper DSE 927
Abstract: 
This paper constructs a simple general equilibrium model to analyse the interactions between the financial and the real sector in an environment where liquidity holdings is an input of the credit/investment process. The supply of liquidity is constrained in that income pledgeability limits inside liquidity, and not all sovereign debt is safe/liquid. We pin down the determinants of liquidity/collateral premia and bond spreads, and with reference to the eurozone: (i) the implications of the ECB's policies on liquidity provision and credit, and (ii) the debt management policy that would increase welfare with no need for transfer payments.
JEL: 
E44
H63
G18
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Working Paper

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