This paper studies the joint business cycle dynamics of inflation, money growth, nominal and real interest rates and the velocity of money. I extend and estimate a standard cash and credit monetary model by adding idiosyncratic preference shocks to cash consumption as well as a banking sector....

During the turbulent 1970s and 1980s the Bundesbank established an outstandingreputation in the world of central banking. Germany achieved a high degree of domesticstability and provided safe haven for investors in times of turmoil in the internationalfinancial system. Eventually the Bundesbank...

Using the Consensus Economics dataset with individual expertforecasts from G7 countries we investigate determinants of disagreement (crosssectionaldispersion of forecasts) about six key economic indicators. Disagreementabout real variables (GDP, consumption, investment and unemployment)has a...

Diese Studie untersucht, ob Veränderungen kurzfristiger Zinsen die Kosten liquider Mittel beeinflussen und somit über Preissetzungsentscheidungen der Firmen auf die Inflationsdynamik in Industrieländern wirken. Barth und Ramey (2001) haben zum Beispiel für die USA gezeigt, dass...

This paper studies a overlapping generations economy with capital where limitedcommunication and stochastic relocation create an endogenous transactions role for…at money. We assume a production function with a knowledge-externality (Romer-style) that nests economies with endogenous growth (AK...

The Friedman rule, a widely studied prescription for monetary policy, is optimal inTownsend’s turnpike model of money; it is not so in the overlapping generations versionof his stochastic relocation model of money. We investigate these monetary models inthe light of this disparity. To that...

In this paper, we explore the connection between optimal monetary policy and heterogeneityamong agents. We study a standard monetary economy with two types of agents inwhich the stationary distribution of money holdings is non-degenerate. Sans type-specific fiscalpolicy, we show that the...

In this paper, we argue that the observed di¤erence in the cost of intraday and overnightliquidity is part of an optimal payments system design. In our environment, the interestcharged on overnight liquidity a¤ects output while the cost of intraday liquidity onlyaffects the distribution of...

A central proposition in research on the role that banks play in the transmission mechanism is that monetary policy imparts a direct impact on deposits and that deposits, insofar as they constitute the supply of loanable funds, act as the driving force of bank lending. This paper argues that the...