the origin of the aggregate volatility reduction. We show that states with relatively high concentrations in the durable-goods …

frictions giving rise to money as a medium of exchange are explicitly modeled. The framework is a three period OLG model where … production efficiency in the search market. In the absence of record-keeping, the government uses flat money as a substitute for … distortionary taxation of money may be needed as part of the optimal policy even if lump-sum taxes are available. …

We study the effects of money (anticipated inflation) on capital formation. Previous papers on this topic adopt reduced …-form approaches, putting money in the utility function or imposing cash in advance, but use otherwise frictionless models. We follow a … literature that is more explicit about the frictions making money essential. This introduces several new elements, including a …

money market rate and the volumes traded at the ECB’s deposit and lending facilities in response to the recent financial …

behaves as a negative wealth effect and generates an immediate decline in output, investment, and hours worked. The large drop … in investment then causes a gradual but very persistent decline in the capital stock. That protracted decline in the …