The Paper provides a formalization of the monetary economics folk proposition that government fiat money is an asset of the holder (the private sector) but not a liability of the issuer (the state). Money is 'net wealth' in the limited sense that, after consolidation of the intertemporal budget...

This theoretical model investigates the implications of the slopes of LM curves and positively sloped IS curves for the size of policy multipliers. It is shown that the effectiveness of monetary policy is greater if the slope of the IS curve is greater. It also is shown that fiscal policy...