In these segments, usually more prone to unemployment and financial shocks, assets like personal time and extra space at home can create massive business opportunities for buyers and sellers in services like TaskRabbit and Airbnb, respectively.
Together, these factors will amplify the impact of shocks on asset prices, resulting in sharper price falls and more market stress.
That will mean either that the gap between bids and offers will widen, or that individual buy-and-sell orders will have a much bigger effect on prices.In consequence a liquidity shock in one asset class may have an effect in others, as dealers become ever more risk-averse.
"I find it shocking that an asset class that has provided so little payback continues to attract so much capital".
An exogenous stochastic shock renders some assets toxic.
MF Global failed recently with about $40 billion in total assets; the shock waves did not bring on global panic.
As a consequence, investors in a country with a diversified culture respond to external shocks differently, which maps asset prices in diverse directions and weakens asset price linkages.
For those poorer groups who are most vulnerable to shocks, we note that asset protection programmes, such as the Index-Based Livestock Insurance effort, and cash transfer programmes, such as the Productive Safety Net, hold promise for resilience in dryland areas, but their impacts merit further study.
Greater innovation and recent improvements in the capacity of technology to reduce the cost of providing sustainable financial services have enabled millions of people to increase their resilience to economic shocks and build assets.
These rising stars of shock-rock lost a major asset when their fire-breathing bassist, Corey Parks, departed for a solo career and a possible jump to the wrestling circuit.
