NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Enforcement Problems and Secondary Markets

Fernando A. Broner, Alberto Martin, Jaume Ventura

NBER Working Paper No. 13559
Issued in October 2007
NBER Program(s):   IFM   AP

There is a large and growing literature that studies the effects of weak enforcement institutions on economic performance. This literature has focused almost exclusively on primary markets, in which assets are issued and traded to improve the allocation of investment and consumption. The general conclusion is that weak enforcement institutions impair the workings of these markets, giving rise to various inefficiencies. But weak enforcement institutions also create incentives to develop secondary markets, in which the assets issued in primary markets are retraded. This paper shows that trading in secondary markets counteracts the effects of weak enforcement institutions and, in the absence of further frictions, restores efficiency.

download in pdf format
   (134 K)

email paper

This paper is available as PDF (134 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w13559

Published: Fernando A. Broner & Alberto Martin & Jaume Ventura, 2008. "Enforcement Problems and Secondary Markets," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 683-694, 04-05. citation courtesy of

Users who downloaded this paper also downloaded these:
Broner, Martin, and Ventura w12783 Sovereign Risk and Secondary Markets
Ventura and Broner w12482 Globalization and Risk Sharing
Cummins, Lewis, and Phillips Pricing Excess-of-Loss Reinsurance Contracts against Cat as trophic Loss
Robinson The Secondary Market for State and Local Government Obligations
Fernández and Ozler w3654 Debt Concentration and Secondary Markets Prices: A Theoretical and Empirical Analysis
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us