Series: IMF Working Papers
Author(s): Ehsan Ebrahimy
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 20 December 2019
Keywords: Real sector, Negative interest rates, Positive interest rates, Interest rate increases, Interest rates, WP, financial development, competitive equilibrium, liquid equilibrium, Tirole
This paper studies a novel type of misallocation of credit between investments of varying liquidity. One type of investment is more liquid, i.e., its return is more pledgeable, and the other is more productive. Low...