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Market Macrostructure: Institutions and Asset Prices

Author

Listed:
  • Valentin Haddad

    (Anderson School of Management, University of California, Los Angeles, California, USA
    National Bureau of Economic Research, Cambridge, Massachusetts, USA)

  • Tyler Muir

    (Anderson School of Management, University of California, Los Angeles, California, USA
    National Bureau of Economic Research, Cambridge, Massachusetts, USA)

Abstract

Market macrostructure studies the broad organization of financial markets into key players and institutional features and how this organization affects the level and dynamics of asset prices. We present a simple model to discuss when, why, and how market macrostructure matters for asset prices. We then review work on three specific examples: the rise of passive investing in the stock market, the increased role of central banks in bond markets through asset purchase programs, and the role of levered financial intermediaries in financial markets. We highlight various approaches to tackling macrostructure questions including quasi-natural experiments, equilibrium models, and the use of detailed quantity data on asset positions.

Suggested Citation

  • Valentin Haddad & Tyler Muir, 2025. "Market Macrostructure: Institutions and Asset Prices," Annual Review of Financial Economics, Annual Reviews, vol. 17(1), pages 133-150, November.
    • Handle: RePEc:anr:refeco:v:17:y:2025:p:133-150
    DOI: 10.1146/annurev-financial-090524-120754
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    Keywords

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    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • G01 - Financial Economics - - General - - - Financial Crises
    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services

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