recognition to the intertemporal nature of households' saving decisions. Like traditional IS-LM, however, the optimizing version … tends to understate the value of money as an indicator for monetary policy. …

stock' model of optimal consumption in the presence of labor income uncertainty and credit constraints. Saving in the model … saving rate's long-term decline, while fluctuations in net wealth and uncertainty capture the bulk of the business …We argue that the U.S. personal saving rate's long stability (from the 1960s through the early 1980s), subsequent …

output changes. In the euro area investment is the predominant driver of output changes, while in the U.S. consumption shifts … investment, as the proximate cause for this fact, the source of the consumption difference remains a puzzle. JEL Classification … several potential explanations for it. While the evidence seems to point at differences in consumption responses, rather than …

. Specifically, they characterize the optimal return on money in the presence of credit arrangements. There is a dual role for credit …: It allows buyers to trade without fiat money and also permits them to borrow against future income. However, not all … traders have access to credit. As a result, there is a social role for fiat money because it allows agents to self …

rate. Money’s role in monetary policy has been tertiary, at best. Indeed, several influential economists have suggested … that money is irrelevant for monetary policy. They suggest that central banks can control inflation by (i) controlling a … rate in order to exert greater control over longer-term rates. I offer an alternative perspective: namely, that money is …

criticized for failing to explain common trends in money growth and inflation, and that therefore money should be used as a cross …

Money demand is probably one of the most extensively studies economic relationships in applied economics. While useful …