An exploration of limited participation models reviews the literature and plots some new directions of research in this area. I constructed and modified a baseline cash-in-advance model to illustrate the main ideas. The model shows how limited participation can explain the liquidity effect and...

The liabilities of private financial institutions (private money) have circulated historically. Current interest in private money has been spurred by advances in information technology that permit new types of payments arrangements. The author uses a search model of money to evaluate some of the...

The purpose of this paper is to discuss some of the models used in New Monetarist Economics, which is our label for a body of recent work on money, banking, payments systems, asset markets, and related topics. A key principle in New Monetarism is that solid microfoundations are critical for...

In this article we construct a simple analytically tractable model to explore and evaluate New Keynesian ideas. First, we show that a New Keynesian model need not exhibit Phillips curve correlations in the absence of strategic price setting by firms. Second, we conclude that New Keynesian...