We present an infinite horizon model with capital in which fiat money and barter are two competing means of payment …. Fiat money has value because barter is limited by the extent of a double coincidence of wants. The pattern of exchange … generally involves both money and barter. We find that the Chicago rule is sufficient for Pareto efficiency, while nominal …

An indexed unit of account is a money analogue, used to express prices; the unit's" purchasing power is defined by an … index. Indexed units of account are not true money in that" they are not used as a medium of exchange. The first successful … units to be used for" all transactions, so that the role of conventional money might be reduced to clearing-house" functions …

Treasury bills and other near-money assets provide owners with liquidity service benefits that are reflected in prices … of money: The liquidity service benefits of near-money assets are more valuable when short-term interest rates are high … and hence the opportunity cost of holding money is high. Consistent with this prediction, the liquidity premium of T …