DP14847 The search theory of OTC markets
|Publication Date:||June 2020|
|Keyword(s):||Asset Pricing, OTC markets, search frictions|
|JEL(s):||G11, G12, G21|
|Programme Areas:||Financial Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=14847|
I review the recent literature that applies search-and-matching theory to the study of Over-the-Counter (OTC) financial markets. I formulate and solve a simple model in order to illustrate the typical assumptions and economic forces at play in existing work. I then offer thematic tours of the literature and, in the process, discuss avenues for future research.