The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Liquidity Constraints

  • Stephen D. Williamson
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2438

Abstract

Liquidity constraints affect the ability of an economic agent to exchange his or her existing wealth for goods and services or for other assets. These constraints arise because of frictions, including private information, limited commitment, transactions costs, and spatial considerations.

Keywords

Cash-in-advance model Consumption smoothing Contingent claims markets Endowments Expected utility Incomplete markets Law of large numbers Limited commitment Liquidity constraints Precautionary savings Private information Risk sharing Search and matching models of monetary exchange 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Stephen D. Williamson
    • 1
  1. 1.