A segmented markets model is constructed in which transactions are conducted using credit and currency. Goods market … of agents in exchanging money for goods, but on the arrangements for clearing and settlement of credit instruments. The …

Many individuals simultaneously have significant credit card debt and money in the bank. The so-called credit card debt … puzzle is, given high interest rates on credit cards and low interest rates on bank accounts, why not pay down this debt …

debts in-curred by any merchant from their hometown. We argue that communal responsibility was effective in enforcing credit …-state Markov chain. We derive conditions under which cash and credit in the anonymous matching market coexist. For fixed but suffi …-ciently low cost of credit, agents will pay with cash in low-quality matches, and use cash and credit in high-quality matches. The …

this paper we provide a model of “identity†and its use in credit transactions. In the environments we construct …-sharing among sellers, via instruments that amount to artificial “quasi-identities,†e.g., credit cards. While such information … and credit can improve welfare relative to the use of credit alone. This occurs because money allows for transactions to …

government sometimes uses the inflation tax because it is the only way to balance its budget. Thus, inflation occurs, at least … two sources of revenue, a flat-rate tax on labor income and the inflation tax. The key assumption is that the tax on labor … income cannot vary over time. The government can issue debt, however. Thus, when spending is high, it can use the inflation …

The paper sets out a monetary business cycle model extended to include the production of credit that serves as an …, in particular by capturing the procyclic movements of monetary aggregates, inflation and interest rates. And its … application to analyse banking episodes indicates that the credit shock helps explain cycle behavior during the US financial …

the inertial response of inflation. The model incorporates labor market frictions, capital accumulation, and nominal price …

of two important empirical debates. First, to what extent properly measured marginal costs affect inflation dynamics …. Second, to what extent purely forward looking inflation can be reconciled with the data. In this paper, we show heterogeneity … estimator, and is not the same for marginal costs or for expected inflation. In particular, under plausible parameter values …