The simple search-theoretic model of fiat money has three symmetric Nash equilibria: all agents accept money with probability 1; all agents accept money with probability 0; and all agents accept money with probability y between 0 and 1. Here the author constructs a nonsymmetric pure strategy...

I present an environment for which both outside and inside money are essential as means of payment. The key model feature is that there is imperfect monitoring of issuers of inside money. I use a random matching model of money where some agents have private trading histories and others have...

In this paper, we develop an endogenous growth model with financial intermediation to examine the effects of financial repression on growth, inflation, and welfare. By limiting the liquidity provision, binding reserve requirements always suppress economic growth while their effect on inflation...

Modern exchange theories model a large market, but do not explain single exchanges. This paper considers the phenomenon of single exchange and formulates the general exchange problem in the form of a system of two equations, subjective and objective. Subjective equilibrium is given by the...

Can nominal contracts create monetary nonneutrality if they arise endogenously in general equilibrium? Yes, if (1) agents have complete information about the money stock and (2) shocks to the system are purely redistributive and private information, precluding conventional insurance markets....

Simple search models have equilibria where some agents accept money and others do not. We argue such equilibria should not be taken seriously - which is unfortunate if one wants a model with partial acceptability. We introduce heterogeneous agents and show partial acceptability arises naturally....