recognition to the intertemporal nature of households' saving decisions. Like traditional IS-LM, however, the optimizing version … tends to understate the value of money as an indicator for monetary policy. …

. Specifically, they characterize the optimal return on money in the presence of credit arrangements. There is a dual role for credit …: It allows buyers to trade without fiat money and also permits them to borrow against future income. However, not all … traders have access to credit. As a result, there is a social role for fiat money because it allows agents to self …

rate. Money’s role in monetary policy has been tertiary, at best. Indeed, several influential economists have suggested … that money is irrelevant for monetary policy. They suggest that central banks can control inflation by (i) controlling a … rate in order to exert greater control over longer-term rates. I offer an alternative perspective: namely, that money is …

Lagos and Wright (2005) demonstrate how the essential properties of a money-search model are preserved in an … markets under limited commitment and private information. The analysis demonstrates clearly how insurance, credit, and money … the Friedman rule. In particular, I find that the same frictions that render money essential may at the same time operate …

money and unrestricted money holdings. He shows that when trade takes place in Walrasian markets, counterfeits circulate and …

substantially changes the dynamics in the model, allowing agents to significantly smooth consumption and reduce the movements in …

held, and of the amount held abroad. Most macroeconomic models that address the role of outside money as a determinant of …