We investigate the function of liquid financial markets for the allocation of productive capital. We consider an economy where agents endogenously choose among capital production technologies with differing gestation periods. Longgestation capital investments must be "rolled-over" in secondary...

This paper formulates a model of commodity money that circulates by tale, and applies it to a variety of situations, some of which seem to confirm, and others to contradict, `Gresham's Law'. We analyze how debasements could prompt decisions of citizens voluntarily to participate in recoinages...

We consider a monetary growth model essentially identical to that of Diamond (1965) and Tirole (1985), except that we explicitly model credit markets, a credit market friction, and an allocative function for financial intermediaries. These changes yield substantially different results than those...

As noted by Gurley and Shaw, there is a typical pattern of economic development in which the evolution of the financial system is an essential aspect of the growth process. We focus on one component of this evolution: the increasing importance of equity markets as an economy grows. We develop a...