This paper studies stationary and nonstationary distributions of money holdings in a random-matching model. The first part characterizes the stationary distributions of money holdings and derives the optimum quantity of money. The second part considers nonstationary distributions of the optimum...

The term digital money refers to various proposed electronic payment mechanisms designed to use by consumers to make retail payments. These mechanisms are based either on smart cards or on network money. Smart cards could potentially replace currency as the predominant means to pay for retail...

This paper considers a strategic game in which two players, with unequal prospects of winning the game, decide simultaneously and secretly to use performance-enhancing drugs before they compete. In the mixed strategy equilibrium, the favorite player is more likely to take these drugs than is the...

We study optimal monetary stabilization policy in a DSGE model with microfounded money demand. A search externality creates ‘congestion’ which causes aggregate output to be inefficient. Due to the informational frictions that give rise to money, households are unable to perfectly insure...

In the summer of 2002, the Swiss National Bank (SNB) hosted the “SNB-Fed Cleveland Workshop on Monetary Economics”. Recent years have seen the development of the search-theoretic approach to monetary theory. It has established itself as an important strand of monetary theory in a very short...