Mohammad Davoodalhosseini is a Senior Economist in the Funds Management and Banking Department. His main research interests are monetary economics and search theory. He is also interested in the role of private information in markets with search frictions, with applications to inter-bank, labor and over-the-counter (OTC) markets. He currently studies the effects of post-financial crisis regulations on various measures of liquidity in OTC markets. His research also concerns central bank digital currency (CBDC). He has studied welfare gains of introducing CBDC, and is interested in the channels through which introducing CBDC may affect banking system and financial stability. Mohammad received his PhD in Economics from the Pennsylvania State University in 2015.
A model of over-the-counter markets is proposed. Some asset buyers are informed in that they can identify high quality assets. Heterogeneous sellers with private information choose what type of buyers they want to trade with.
Constrained efficient allocation (CE) is characterized in a model of adverse selection and directed search (Guerrieri, Shimer, and Wright (2010)). CE is defined to be the allocation that maximizes welfare, the ex-ante utility of all agents, subject to the frictions of the environment.