In models with heterogeneous agents, issues of distribution and redistribution jump to the fore, raising the question: Which policies-monetary or fiscal-work most effectively in transferring income between groups? From Townsend's turnpike model, two basic results emerge to help answer this...

In this paper, the choice of an intermediate target for monetary policy is considered using a model that allows each alternative to be judged based on its welfare effects, measured using a representative household's utility function. The results show that nominal income targeting is preferable...

This paper extends a New Keynesian model to include roles for currency and deposits as competing sources of liquidity services demanded by households. It shows that, both qualitatively and quantitatively, the Barnett critique applies: while a Divisia aggregate of monetary services tracks the...