asset liquidity fire sales and l

the literature on asset liquidity, fire sales, and limited arbitrage. Shleifer and

Vishny (1992) show how asset illiquidity, defined as the inability to sell an asset for its value in best use, results from the simultaneous debt overhang facing all of the specialist buyers in a given industry. Shleifer and Vishny

(1997) show how asset prices fall below fundamental values when intermediaries involved in arbitrage lose the capital of uninformed investors after poor performance. Arbitrageurs liquidate their positions in a crisis, rather than stabilize prices. Recently, research in this area has advanced rapidly, with significant contributions by Gromb and Vayanos (2002), Fostel and Geanakoplos (2008), He and Krishnamurthy (2008), Acharya, Gale and Yorulmazer (2009), Benmelech and Bergman (2009), Brunnermeier andPedersen (2009), and Diamond and Rajan（2009）