, but also generate endogenous business cycles driven primarily by the cyclical utilization rate of credit resources, as … long conjectured by the Austrian school of the business cycle. In particular, we show that credit search can lead to …

. This paper provides yet another case when first-order methods may be inadequate for capturing the business cycle properties … induce asymmetric business cycles and nonlinear income effects that are not fully captured by linear approximation methods …

.wen@stls.frb.org. 1 1 Introduction This paper reconsiders the business-cycle and welfare e�ects of money by generalizing Bewley�s (1980 … money.1 The model is applied to studying some important issues in monetary literature, including (i) the business … address some of the issues considered in this paper, such as the dynamics of velocity, the monetary business cycle, the …

, Borrowing Constraints, Heterogenous Firms, Business Cycle. JEL codes: D21, D58, E22, E32. We thank John Haltiwanger and Thomas … business-cycle analyses under aggregate shocks without having to worry about the optimality of an always-binding borrowing … by increased R&D innovations. Kaas (2009) develops a real business cycle model with idiosyncratic productivity shocks and …

, 1988, �Production, Growth, and Business Cycles: I. The Basic Neoclassical Model,�Journal of Monetary Economics, 21(2-3), pp …�nite-horizon, representative-agent neoclassical growth model and its monetized versions remain the paradigm of business-cycle and monetary policy … (1999) show that the welfare costs of business cycles with uninsurable individual risks are small and similar to those …