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 …