Abstract
Liquidity is the crucial prerequisite for the normal working of financial markets. Only the properly liquid money markets can work successfully. The liquidity of business sectors, more accurately the absence of it, influences the entire financial system, and the entire economy, repressing their typical way of working. The financial bubble of 2008 has indicated remarkable significance of the liquidity of the financial markets, and in the meantime it pushed this inquiry to the spotlight. The modification and supplementation of the standard equilibrium and no-arbitrage models which accept the presence of infinity liquidity has turned into a need, as there is a clear necessity to develop new pricing and detection models and risk management systems.
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Reference
P. Shen, R.M. Starr, Market-makers’ supply and pricing of financial market liquidity. Econ. Lett. 76(1), 53–58 (2002)
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Karimov, A. (2017). Introduction. In: Identifying Stock Market Bubbles. Contributions to Management Science. Springer, Cham. https://doi.org/10.1007/978-3-319-65009-8_1
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DOI: https://doi.org/10.1007/978-3-319-65009-8_1
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Online ISBN: 978-3-319-65009-8
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