The standard economic approach to considering the effects of a policy tends to neglect the prospect of regulatory ambiguity. I describe four sources of regulatory ambiguity and survey the literature considering the effects of ambiguity on entrepreneurial activity. I also explain how...

The emergence of bitcoin poses an important question for monetary theorists: can bitcoin compete with or even replace existing fiat monies? To answer this question, one must be able to determine what gives intrinsically useless monies their value, what determines the coexistence of alternative...

The New Keynesian literature focuses on rules-based interest rate policies, abstracting from the role of monetary aggregates. In the background, though, the quantity equation must hold — every transaction requires money, with money units used in multiple transactions within a period. What is...

We make a distinction between centralized, decentralized, and distributed payment mechanisms. A centralized payment mechanism processes a transaction using a trusted third party. A decentralized payment mechanism processes a transaction between the parties to the transaction. A distributed...

In a recent article, Yermack (2015) argues that bitcoin is not money because it functions poorly as a medium of exchange, unit of account, and store of value. We offer a more conventional view. We maintain that the standard approach classifies an item as money if and only if it functions as a...

Determining the correct monetary aggregate to use is (or at least should be) an important consideration when taking any monetary model to the data. In this paper I present a basic monetary search model with two assets, currency and bonds. I assume that in order for assets to be used in trade,...

By declaring an item legal tender or making it publicly receivable, governments might generate sufficient demand to determine the medium of exchange. How do private actors launch a new currency? There are two views in the literature. The first requires offering an item with use value to some...

Monies are typically categorized as commodity or fiat, depending on whether the item in question is intrinsically worthless. In the case of bitcoin, it is not so clear. I consider the superficial subjective value argument often put forward by non-monetary economists and a more sophisticated...

Over the course of U.S. history there have been a small number of occasions in which aggregate nominal spending has declined, the most recent of which occurred during the recession that began in December 2007. Coincident with these observed declines in nominal spending are declines in the...