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Liquidity and Market Incompleteness

Author

Listed:
  • Felipe Zurita

    (Instituto de Economía. Pontificia Universidad Católica de Chile.)

Abstract

This note shows that according to Lipmann and McCall's (1986) operational definition of liquidity, incomplete markets are a necessary condition for illiquidity.

Suggested Citation

  • Felipe Zurita, 2007. "Liquidity and Market Incompleteness," Documentos de Trabajo 318, Instituto de Economia. Pontificia Universidad Católica de Chile..
    • Handle: RePEc:ioe:doctra:318
    as

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    File URL: https://www.economia.uc.cl/docs/doctra/dt-318.pdf
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    References listed on IDEAS

    as
    1. Lippman, Steven A & McCall, John J, 1986. "An Operational Measure of Liquidity," American Economic Review, American Economic Association, vol. 76(1), pages 43-55, March.
    2. Felipe Zurita, 2001. "Liquidity as an Insurance Problem," Documentos de Trabajo 198, Instituto de Economia. Pontificia Universidad Católica de Chile..
    3. Eichberger, Jurgen & Harper, Ian R., 1997. "Financial Economics," OUP Catalogue, Oxford University Press, number 9780198775409.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Ioannis Polyrakis & Foivos Xanthos, 2011. "Maximal submarkets that replicate any option," Annals of Finance, Springer, vol. 7(3), pages 407-423, August.

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    More about this item

    Keywords

    Liquidity; insurance;

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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