Showing 1 - 10 of 19
We construct a continuous-time, New-Monetarist economy that displays an endogenous, non-degenerate distribution of money holdings. Properties of equilibria are obtained analytically and equilibria are solved in closed form in a variety of cases. Lump-sum transfers financed with money creation...
Persistent link: https://www.econbiz.de/10011937389
Persistent link: https://www.econbiz.de/10012602694
I apply mechanism design to quantify the cost of inflation that can be attributed to monetary frictions alone. In an environment with pairwise meetings, the money demand that is consistent with a constrained-efficient allocation takes the form of a continuous correspondence that can fit the data...
Persistent link: https://www.econbiz.de/10008839550
Persistent link: https://www.econbiz.de/10009626725
We construct a search-theoretic model where fiat money coexists with real assets, and all assets can be used as a media of exchange. The terms of trade in bilateral matches are determined by a pairwise Pareto-efficient pricing mechanism. We do not have to appeal to exogenous liquidity...
Persistent link: https://www.econbiz.de/10010871014
Persistent link: https://www.econbiz.de/10005090837
We study the effects of inflation in models with various trading frictions. The framework is related to recent search-based monetary theory, in that trade takes place periodically in centralized and decentralized markets, but we consider three alternative mechanisms for price formation:...
Persistent link: https://www.econbiz.de/10005061927
Persistent link: https://www.econbiz.de/10003094612
This paper studies the effects of anticipated inflation on aggregate output and welfare within a search-theoretic framework. We allow money-holders to choose the intensities with which they search for trading partners, so inflation affects the frequency of trade as well as the quantity of output...
Persistent link: https://www.econbiz.de/10014223066
This paper investigates the welfare effects of inflation in economies with search frictions and menu costs. We first analyze an economy where there is no transaction demand for money balances: Money is a mere unit of account. We determine a condition under which price stability is optimal and a...
Persistent link: https://www.econbiz.de/10014223072