An operational measure of liquidity

Arbeitspapier

Economists' view of liquidity is askin to Supreme Court Justice Stewart's View of hard-core pornography: I shall not ... attempt further to define (it) .... But I know it when I see it. Embedding the process of selling an asset in a search environment enables us to provide an exact definition of liquidity: an asset's liquidity is the expected time until it is sold while pursuing an optimal (in the sense of maximization of expected discounted net proceeds) policy. Our analysis reveals that this definition is compatible with most other notions of liquidity and, in particular, with those of Keynes1 , impatience, the discount associated with a quick sale, and predictability.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Diskussionsbeiträge - Serie A ; No. 187

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): McCall, John J. ; Lippman, Steven A.
• Event: Veröffentlichung
• (who): Universität Konstanz, Fakultät für Wirtschaftswissenschaften und Statistik
• (where): Konstanz
• (when): 1984

Further information

• Handle: http://hdl.handle.net/10419/75135
• Last update: 10.03.2025, 11:43 AM CET