This paper demonstrates the way in which episodes of hot and cold trading activity can occur in a stock-flow matching market. A market experiences high entry and turnover when potential sellers enter the market knowing that buyers went unsatisfied in the previous trading opportunity. Provided...

At any given point of time in an actual economy, some individuals hold more money than other individuals do. This non-degenerate distribution of money holdings among individuals is a rationale for a range of policies designed for reallocating liquidity among individuals. However, monetary theory...

Arguably the most difficult question in macroeconomics is: why do individuals set prices in nominal terms that do not respond to changes in the aggregate price level? Of course some must respond, or the aggregate does not change, but many prices seem sticky in the short run. In popular macro...