4 votes

What is the difference between microeconomics money and macroeconomics money?

There is no distinction between money in microeconomics or macroeconomics. In both fields money is medium of exchange, unit of account and store of value. The misconception you have probably arises ...
1muflon1's user avatar
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3 votes
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What are the effects of liquidity crisis?

Lack of liquidity depresses the output and can lead to recessions because it forces otherwise healthy firms to go bankrupt and it also undermines the financial infrastructure of an economy. I think ...
1muflon1's user avatar
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2 votes

Initial creation of reserves

The current international monetary system based on pure fiat currency is a post-1970s system. For a long time before that most of the international monetary system was based on the gold standard. With ...
Kent Shikama's user avatar
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2 votes

How did the massive flight to long-term bonds create a liquidity crisis?

This is because in order for many business to stay liquid they often have to issue short term debt. Many financial firms need liquidity so much that they literally make loans that are for duration of ...
1muflon1's user avatar
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2 votes

Relationship between forward rate, future spot rate, and liquidity preference

In addition to comment given by @dismalscience, here you may find partial answer (hope I got everything right below). Since many similar terms refer to concepts that are close to each other, I'm also ...
Gspia's user avatar
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2 votes
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What's the difference of economic capital and liquidity buffer?

Different sides of the balance sheet. Capital represents long-dated instruments (infinite lifetime in the case of common equity) issued by a bank that are subordinated in a way to make them ...
Brian Romanchuk's user avatar
2 votes
Accepted

Characteristics of market liquidity

Each of the aspects mentioned by Kyle points to a useful definition of "liquidity." Tightness of the market refers to the bid-ask spread, the price difference between the highest bid price ...
kurtosis's user avatar
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2 votes
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Was there a drop in liquidity in the corporate bond market during the Global Financial Crisis?

"...if such a...cycle exists..."---i.e. in economic language, whether liquidity and demand are endogenous to each other. Yes, of course they are. Liquidity (or illiquidity) of any asset can ...
Michael's user avatar
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1 vote

The Fed's repo amount and TGCR shows positive pearson correlation. How so?

You need to understand the context. In the fall of 2019, the TGCR began moving upwards, because the banking system became short of reserves as the Federal Reserve was conducting Quantitative ...
dm63's user avatar
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1 vote

Was there a drop in liquidity in the corporate bond market during the Global Financial Crisis?

Liquidity is a vague term, and it is more useful to talk about other factors that are measurable. However, the theory that a lack of liquidity alone causes investors to shy away runs against the ...
Brian Romanchuk's user avatar
1 vote

What is the difference between the discount window and Fed repos?

Economically, they are both loans against financial instruments. The difference is the collateral posted - repos by the Fed are generally against Treasury securities. This is not a small difference: ...
Brian Romanchuk's user avatar
1 vote

What is the difference between microeconomics money and macroeconomics money?

I think for your purposes, the best answer to the question is what you appear to be anticipating: in certain macroeconomics discussions, "money" operates primarily as a unit of account, because of the ...
heh's user avatar
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1 vote

At what rate can a multi-billionaire liquidate his assets without significantly affecting the stock price?

One place to start would be to look at the OnBalanceVolume technical indicator. This is by no means reliable, but it’s a place to start. It tells you how much of the volume hit the bid vs how much ...
Keith Knauber's user avatar
1 vote

Initial creation of reserves

Asking how the system could bootstrap itself into existence using current rules is ahistorical. There are two ways of answering this. Historically, the developed countries evolved from various ...
Brian Romanchuk's user avatar
1 vote

Most profitable conversion of stock into money

Yes. There is a good chapter on this general question in The Valuation Handbook book by Ashok Abbott. It is a whole chapter so it is too long reproduce here. Shortened down, he shows that there is ...
Dave Harris's user avatar
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1 vote

How can a crypto currency crash affect liquidity?

As an initial note, I have not seen any plausible claims that a crypto crash would cause liquidity problems for the financial system. As a reult, I would need to guess to the mechanism. I do not ...
Brian Romanchuk's user avatar
1 vote

Wealth - Bond Market and Liquidity Preference Framework

These are theories, so need empirical justification. They may not be true, and even if they appear to be true they may still be wrong about the cause and effect. If you regard your first statement ...
Henry's user avatar
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1 vote
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Isn't the liquidity trap about real interest rates?

The situation you describe, one with negative nominal rates, only can happen with the use of force or where the instrument acts as an insurance policy. In the case where the instrument serves as an ...
Dave Harris's user avatar
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