This paper shows that a small amount of individual-level money illusion may cause considerable aggregate nominal … asymmetric effects because of money illusion. While nominal inertia is quite substantial and long lasting after a negative shock …

This paper reports findings from an experiment that implements a search-theoretic model of money as a medium of …

of the monetary equilibrium. We also study versions of the model without money where all equilibria involve non …-monetary gift-exchange. We find that welfare is higher in the model with money than without money, suggesting that money plays a …

We ask whether the following observations may result from endogenously determined fluctuations in the money multiplier … rather than a causal influence of money on output: (i) M1 is positively correlated with real output; (ii) the money … (vi) real money balances are smoother than money-demand equations would predict. …

Post-1980 US data trace out a stable long-run money demand relationship of Cagan's semi-log form between the M1-income … ratio and the nominal interest rate, with an interest semielasticity below 2. Integrating under this money demand curve … quantity of money that are quite small. The results suggest that the Federal Reserve's current policy, which generates low but …