Money and its underlying function as a medium of exchange play a central role in determining the course of … macroeconomic activity. However, many of the models used to evaluate fundamental questions relating money and monetary policy to … economic activity simply assume currency is valued and overlook the important properties of money that influence the way it is …

We study the effects of money (anticipated inflation) on capital formation. Previous papers on this topic adopt reduced …-form approaches, putting money in the utility function or imposing cash in advance, but use otherwise frictionless models. We follow a … literature that is more explicit about the frictions making money essential. This introduces several new elements, including a …

, either by themselves, or alongside a stock of outside money. In each case we provide results on the existence and …

question of the optimal quantity of money. This paper takes a first step in comparing these two different results. …