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Liquidity and market incompleteness

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  • Felipe Zurita

Abstract

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

  • Felipe Zurita, 2008. "Liquidity and market incompleteness," Annals of Finance, Springer, vol. 4(3), pages 299-303, July.
    • Handle: RePEc:kap:annfin:v:4:y:2008:i:3:p:299-303
    DOI: 10.1007/s10436-007-0080-4
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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, Decembrie.
    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; Market incompleteness; G10; D83; G22;
    All these keywords.

    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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