The determinants of a substantial portion of bond credit spreads remain puzzled in literature. Through investigating corporate bond credit spreads from year 2000 to 2005, we find that corporate internal liquidity still significantly impacts on corporate bond credit spreads when controlling other well-known variables stated in literature. Additionally, we also find that there is a systematic int...

Where trade is decentralized and information is imperfect, an urban housing market should be organized into separate market segments. Units in more active market segments should sell at a premium if households value asset liquidity. Evidence from the Hong Kong housing market strongly supports the joint hypothesis of market segmentation and transaction-based liquidity effects in the housing mark...

I examine how bank liquidity and capital affect banks’ behavior in asset sales using data on sales of bank owned real estate. I find that: (1) banks with lower liquidity levels post lower asking prices and receive lower sale prices; (2) banks with lower capital levels post higher asking prices, which then lead to longer time on the market. Further analyses show that the results are unlikely to ...

Considerable portion of housing sector from gross domestic product indicates relationship between housing sector and macroeconomics. This paper focuses on consumption demand of housing and variables that can affect it and represents a theoretical framework for changes of housing prices regarding variables such as income per capita, liquidity and land per capita, the present paper studies effect...

Recent influential work argue that a gradual increase in the sales tax stimulates economic activity liquidity trap by boosting inflation expectations. Higher public infrastructure investment should also be more expansive than normal times raising potential interest rate and increasing aggregate demand. We analyze relative merits of these policies New Keynesian models with without endogenous pri...