This paper is part of the growing literature that uses micro-data to distinguish among alternative price behavior models and provide some measurements essential for calibration exercises. We use weekly grocery US scanner data and attempt to distinguish among three types of models: State...

We study general equilibrium with nonconvexities. In these economies there exist sunspot equilibria without the usual assumptions needed in convex economies, and they have good welfare properties. Moreover, in these equilibria, agents act as if they have quasi-linear utility. Hence wealth...

Monetary search models are difficult to analyze unless the distribution of money holdings is made degenerate. Popular techniques include using an infinitely large household (Shi 1997) and adding a centralized market with quasi-linear utility (Lagos and Wright 2005). Wallace (2002) suggests as an...

This paper studies the long run effects of monetary policy in a micro-founded model with trading frictions and endogenous market segmentation. Agents must pay a fixed cost to participate in a centralized liquidity market. By endogenizing the participation decision, this model endogenizes the...

A settlement system is a set of rules and procedures that govern when and how funds are transferred between banks. Perhaps the most crucial feature of a settlement system is the frequency with which settlement occurs. On the one hand, a higher frequency of settlement limits the risk of default...

Should monetary policy be cyclical? The debate around this question is old but has benefited very little from research on the pure theory of money. In our model, people trade in pairs, without double coincidence of wants and face seasonal fluctuations. Monetary policy is restricted to taxing...

We study markets where innovators can sell ideas to entrepreneurs, who may be better at implementing them. These markets are decentralized, with random matching and bargaining. Entrepreneurs hold liquid assets lest potentially profitable opportunities may be lost. We extend existing models of...

Under the U.S. National Banking System (NBS), in effect from 1863--1914, banks with national charters could issue notes under four main restrictions: full collateral in the form of government bonds, a per-period tax on outstanding notes, redemption of notes into (outside) money on demand, and a...

We analyze how the preference structure and the structure of production possibilities in the monetary economy can lead to a variety of distributions of special and standard goods produced in the economy