- Title
- Exchange liquidity and redemption liquidity
- Creator
- Culham, James
- Date
- 2023
- Type
- Text; Journal article
- Identifier
- http://researchonline.federation.edu.au/vital/access/HandleResolver/1959.17/192646
- Identifier
- vital:18028
- Identifier
-
https://doi.org/10.1093/cje/bead012
- Identifier
- ISSN:0309-166X (ISSN)
- Abstract
- Disagreements over the nature of money and consequent confusions regarding liquidity contribute to difficulties integrating monetary theory into the theory of value. For example, an abundance of market liquidity is assumed in asset pricing, whereas a scarcity of monetary liquidity is deemed necessary for consumer price-level determinacy. This paper builds on the insights gained from the evolution of finance to introduce a distinction between exchange liquidity and redemption liquidity as a means of resolving this conceptual dissonance. Both exchange and redemption liquidity can be conceptualised as types of financial option differing in the exercise mechanism offered to the option holder by the option-writer. © 2023 The Author(s). Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved.
- Publisher
- Oxford University Press
- Relation
- Cambridge Journal of Economics Vol. 47, no. 3 (2023), p. 667-679
- Rights
- All metadata describing materials held in, or linked to, the repository is freely available under a CC0 licence
- Rights
- Copyright © 2023 The Author(s)
- Subject
- 3502 Banking, finance and investment; 3801 Applied economics; Liquidity; Liquidity preference; Rate of interest
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