frictions giving rise to money as a medium of exchange are explicitly modeled. The framework is a three period OLG model where … production efficiency in the search market. In the absence of record-keeping, the government uses flat money as a substitute for … distortionary taxation of money may be needed as part of the optimal policy even if lump-sum taxes are available. …

We study the effects of money (anticipated inflation) on capital formation. Previous papers on this topic adopt reduced …-form approaches, putting money in the utility function or imposing cash in advance, but use otherwise frictionless models. We follow a … literature that is more explicit about the frictions making money essential. This introduces several new elements, including a …

stabilization policy in a DSGE model with microfounded money demand and endogenous firm entry. Due to a congestion externality …

fully flexible and money is essential for trade. Our main result is that if the central bank pursues a price-level target … policy involves smoothing nominal interest rates which effectively smooths consumption across states. …

. Unlike physical capital, intermediated claims are assumed to be liquid-they constitute a form of asset-backed money. The … strictly positive inflation. While it is also possible to implement the first-best by introducing at money and a lump- sum tax …

money market rate and the volumes traded at the ECB’s deposit and lending facilities in response to the recent financial …