The distribution of money across the economy determines relative prices which, in turn, determines the profile of production across the economy. Therefore any monetary shock that alters the distribution of money will also have an impact on output and employment.

The paper introduces a version of rationalizability that ignores strategies that are supported by negligible sets of beliefs, where a negligible set is one whose Lebesgue measure is zero. The theory is developed solely for the special case of point rationalizability; conditions are then derived...

In a classic paper, "The Lag in Effect of Monetary Policy," Friedman (1961) describes an expansionary open market operation as diffusing across the economy, pulling the price in one market out of line with the price in the next market as it spreads. The objective of this paper is to build a...