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...

This paper investigates the welfare and output effects of inflation in a monetary economy with search frictions and sticky prices. Agents trade in both a centralized Walrasian market and a decentralized search market. Trade has two dimensions: the frequency of trades (how often agents trade) and...

This paper studies the long-run effects of anticipated inflation on output and welfare within a search-theoretic framework. We allow money-holders to choose the intensities with which they search for trading partners, so the frequency of trades is endogenous. We consider the standard pricing...