---- Acknowledgements -----
This paper is a much revised version of an earlier draft titled “Competing Liquidities: Corporate Securities, Real Bonds and Bubbles”. We thank Fernando Alvarez, Marios Angeletos, Pol Antras, Gadi Barlevy, Ricardo Caballero, V.V. Chari, Gita Gopinath, Robert King, Anton Korinek, John Leahy, Guido Lorenzoni, Kiminori Matsuyama, Adriano Rampini, Guillaume Rocheteau, Kjetil Storesletten, Ivan Werning, Wei Xiong, four anonymous referees, and participants at various seminars and conferences for useful comments. The financial support of the FdR IDEI-SCOR research project ”Market Risk and Value Creation” is gratefully acknowledged. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.