The idea of totally deregulating the financial system and implementing monetary policy through currency control has received renewed attention. An important aspect concernin g the desirability of using currency as the instrument of policy is t he behavior of the demand for currency. This paper...

Recently there has been growing interest in using general equilibrium models to understand the effects of monetary policy on interest rates and real economic activity. This research effort has involved the search for models that generate liquidity effects. One branch of this research employs...

This paper incorporates home production into a dynamic general equilibrium model of overlapping generations with endogenous retirement to study Social Security reforms. Specifically, home production takes housing, home input, and home hours as inputs and produces a good that is substitutable...

Empirical evidence suggests that movements in international relative prices are large and persistent. Nontraded goods, both in the form of final consumption goods and as an input into the production of final tradable goods, are an important aspect driving international relative price movements....

Though built with increasingly precise microfoundations, modern optimizing sticky price models have displayed a chronic inability to generate large and persistent real responses to monetary shocks, as recently stressed by Chari, Kehoe, and McGrattan (2000). We trace this lack of persistence to a...

This paper explores the implications of rational expectations and the aggregate supply theory advanced by Lucas (1973) for analysis of optimal monetary policy under uncertainty along the lines of Poole (1970), returning to a topic initially treated by Sargent and Wallace (1975). Not...