This dissertation consists of three essays concerning financial and monetary economics. Essay 1, "Dynamic General Equilibrium Models", proposes an alternative approach to the study of equilibrium properties of dynamic economies. By exploring the properties of the so-called law of motion, we provide sufficient conditions to guarantee existence, determinacy, and robustness of equilibria. Essay 2, "Asset Price Volatility and Investment Restrictions", explores the role of portfolio constraints in generating multiplicity and asset price variability. We show that investment restrictions give rise to (i) multiple-inefficient-equilibria, (ii) sunspots, and (iii) equilibrium indeterminacy. Our model is also capable of generating moves in asset prices unrelated to fundamental dividend processes: such a move could arise from a switch in investors' expectations due to a sunspot. Essay 3, "Monetary Policy and Asset Prices" develops a dynamic model in which money and a financial asset compete as media of exchange. We show that money circulates if and only if real assets are scarce, in the sense that their supply is not sufficient to satisfy the demand for liquidity. Our model also generates a connection between asset prices and monetary policy. When money grows at a higher rate, inflation is higher and the return on money decreases. In equilibrium, no arbitrage amounts to equating the real return of both objects. Thus, the price of the asset increases in order to lower its real return.
