Liquidity preference hypothesis

The argument that greater liquidity is valuable, all else equal. Also, the theory that the forward rate exceeds expected future interest rates. The New York Times Financial Glossary

Financial and business terms. 2012.

Look at other dictionaries:

  • liquidity preference hypothesis — The argument that greater liquidity is valuable, all else equal. Also, the theory that the forward rate exceeds expected future interest rates. Bloomberg Financial Dictionary …   Financial and business terms

  • liquidity preference — (1) A desire among some holders of financial instruments to keep some or all of their funds in liquid instruments, that is, instruments that either mature in a short period of time or that can be readily sold with small risk of loss. (2) A theory …   Financial and business terms

  • expectations hypothesis — The theory that the shape of yield curves is determined by investors collective expectations of future interest rates. See implied forward rates. Also see liquidity preference for a modification of this interest rate theory. American Banker… …   Financial and business terms

  • IS/LM model — The IS curve moves to the right, causing higher interest rates (i) and expansion in the real economy (real GDP, or Y). The IS/LM model (Investment Saving/Liquidity preference Money supply) is a macroeconomic tool that demonstrates the… …   Wikipedia

  • Modern portfolio theory — Portfolio analysis redirects here. For theorems about the mean variance efficient frontier, see Mutual fund separation theorem. For non mean variance portfolio analysis, see Marginal conditional stochastic dominance. Modern portfolio theory (MPT) …   Wikipedia

  • Pigou effect — The Pigou effect is an economics term that refers to the stimulation of output and employment caused by increasing consumption due to a rise in real balances of wealth, particularly during deflation. Wealth was defined by Arthur Cecil Pigou as… …   Wikipedia

  • History of economic thought — The history of economic thought deals with different thinkers and theories in the field of political economy and economics from the ancient world to the present day. British philosopher Adam Smith is cited by many as the father of modern… …   Wikipedia

  • Capital asset pricing model — In finance, the Capital Asset Pricing Model (CAPM) is used to determine a theoretically appropriate required rate of return of an asset, if that asset is to be added to an already well diversified portfolio, given that asset s non diversifiable… …   Wikipedia

  • Mathematical economics — Economics …   Wikipedia

  • Preferred stock — Financial markets Public market Exchange Securities Bond market Fixed income Corporate bond Government bond Municipal bond …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.