This paper looks at the history of money and its modern form from a scientific and mathematical point of view. The approach here is to emphasize simplicity. A straightforward model and algebraic formula for a large economy analogous to the ideal gas law of thermodynamics is proposed. It may be...

We calculate an "enlarged" Phillips curve for a theoretical EMU with 12+8 Member States. Both the empirical evidence and the econometric analysis show the worsening of the trade-off between inflation and unemployment, and hence the need to revise, at least temporarily, the stance of the ECB...

Three issues regarding asset prices and monetary policy are clarified. First, increases in asset prices due to monetary expansion, despite their “paper” wealth nature, tend to make current consumers as a whole wealthier. Second, the weaker (stronger) effect of monetary policy on investment...

Recent empirical results about the US term structure are difficult to reconcile with the classical hypothesis of rational expectations even if time-varying but stationary term premia are allowed for. A hypothesis of rational learning about the conditional variance of the log pricing kernel is...

El corto es un instrumento de política monetaria que utiliza el Banco de México para abatir la inflación. El corto ha sido un instrumento muy útil para Banco de México en la conducción de la política monetaria, porque ha permitido que los choques a los mercados se distribuyan y se...

The purpose of this paper is to estimate the demand for money in Malaysia over the 1980:1-1994:10 period using cointegration and error correction methodology. The analysis shows that money balance, income, exchange rate, price and interest rate are cointegrated. Thus, the long- run demand for...

We examine the extent, causes and consequences of the use of foreign currency as a co-circulating medium of exchange and store of value in Latin America. Using new estimates of the amount of foreign currency in circulation in the form of US dollars, we obtain unique measures of currency...

Cross-country evidence on inflation and income inequality suggests that they are positively correlated. I explore the hypothesis that this correlation is the outcome of a distributional conflict underlying the determination of fiscal policy.

We describe a class of monetary economies that generate persistent episodes of high and low inflation. In this class of economies, variations in expectations can lead private agents to take actions which then make it optimal for the monetary authority to validate those expectations. We think...

The determinants of money velocity are explored under various assumptions on interest rate uncertainty in a monetary general equilibrium model. It is found that the appearance of velocity function instability can be produced by overlooking interest rate stochastic volatility. In addition, when...