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Incomplete Markets and Financial Instability. The Role of Information

Author

Listed:
  • Cristian Ionescu

    (Academy of Economic Studies, Romania)

Abstract

Considering the way that the world economy has evolved over the last 30-40 years, there was a transition from a predominant real economy to a predominant financial economy. Once, there were prevalent economic crises (when the real economy was important); today, the economies all around the world face prevalent financial crises; therefore, it is extremely important to study the role of financial markets, especially the incomplete markets feature (given by the imperfect information). The paper aims to analyze the relationship between imperfect information and incomplete financial markets and the way they are affecting the financial stability.

Suggested Citation

  • Cristian Ionescu, 2012. "Incomplete Markets and Financial Instability. The Role of Information," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 12(1), pages 141-150.
    • Handle: RePEc:pet:annals:v:12:y:2012:i:1:p:141-150
    as

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    References listed on IDEAS

    as
    1. Vlieghe, Gertjan W, 2007. "Imperfect credit markets: implications for monetary policy," MPRA Paper 12957, University Library of Munich, Germany.
    2. Upper, Christian & Worms, Andreas, 2004. "Estimating bilateral exposures in the German interbank market: Is there a danger of contagion?," European Economic Review, Elsevier, vol. 48(4), pages 827-849, August.
    3. Suleyman Basak & Georgy Chabakauri, 2012. "Dynamic Hedging in Incomplete Markets: A Simple Solution," The Review of Financial Studies, Society for Financial Studies, vol. 25(6), pages 1845-1896.
    4. Piero Gottardi & Rohit Rahi, 2014. "Value Of Information In Competitive Economies With Incomplete Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(1), pages 57-81, February.
    5. Victoria Saporta, 1997. "Which Inter-dealer Market Prevails? An analysis of inter-dealer trading in opaque markets," Bank of England working papers 59, Bank of England.
    6. Tan, Kang Yong & Tanaka, Misa, 2008. "International monetary co-operation in a world of imperfect information," Bank of England working papers 344, Bank of England.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Magdalena, RADULESCU, 2014. "Reforming The European Financial And Banking Architecture In The Crisis Context. The Banking Union Concept," Management Strategies Journal, Constantin Brancoveanu University, vol. 26(4), pages 291-298.

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    More about this item

    Keywords

    financial instability; imperfect markets; incomplete markets; imperfect information; monetary policy; financial markets;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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