This paper constructs a two-country stochastic growth model in which neutraland investment-specic technology shocks are nonstationary but cointegrated acrosseconomies. It uses this model to interpret data showing that while real investmenthas grown faster than real consumption in the United...

This paper extends a New Keynesian model to include roles for currency and depositsas competing sources of liquidity services demanded by households. It showsthat, both qualitatively and quantitatively, the Barnett critique applies: While a Divisiaaggregate of monetary services tracks the true...