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This paper provides novel evidence on the causal connections between legal institutions, credit markets, and real economic activity. Our analysis exploits an unexplored within-country setting—Native American reservations—together with quasi-experimental variation in legal contract...
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This paper offers a monetary theory of asset liquidity—one that emphasizes the role of assets in payment arrangements …—and it explores the implications of the theory for the relationship between assets’ intrinsic characteristics and liquidity … money coexists with a real asset, and no restrictions are imposed on payment arrangements. The liquidity of the real asset …
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I extend and discuss the model of asset liquidity by Lester, Postlewaite, and Wright (2007, 2008). I consider a model with decentralized trades in which claims on a real and divisible asset serve as means of payment. A recognizability problem is introduced by assuming that the claims on the...
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This paper develops a model of currency circulation under asymmetric information. Agents are heterogeneous and trade in bilateral matches. Coins are intrinsically valuable and are available in two weights, light and heavy. We characterize the equilibrium under complete information and under...
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