Illiquidity and Interest Rate Policy
---- Acknowledgements -----
We thank the National Science Foundation and the Center for Research on Securities Prices at Chicago Booth for research support. Rajan also thanks the Initiative on Global Markets at Chicago Booth for research support. We benefited from comments from Guido Lorenzoni, Tano Santos and José Scheinkman and seminar participants at the Richmond Fed, Stanford University, the University of Chicago, and the American Economic Association meetings at San Francisco in 2009 and the Federal Reserve Bank New York conference on Central Bank Liquidity Tools. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.