Bank-created money, shadow-bank money, and Treasury bonds all satisfy investor's demand for a liquid transaction medium and safe store of value. We measure the quantity of these three forms of liquidity and their corresponding liquidity premium over a sample from 1926 to 2016. We empirically...

We examine the relationship between households’ demand for traditional money and the proliferation of alternative financial assets using a cross-section of countries. We have found that the inclusion of the disaggregated indicators of financial assets improves the money demand models. Notably,...

In this article we derive a microfounded model of money demand under uncertainty built on intertemporally optimizing risk-averse households. Deriving a complete solution of the optimization problem taking the intertemporal budget constraint into account where linearization procedures in our...

Central banks repo market operations and liquidity infusions occasion a structural liquidity mismatch in bank balance sheets and increase the dependence on central bank liquidity. This paper argues for what I term “Circular Monetary Economics”, an approach to monetary policy that seeks to...

Bank-created money, shadow-bank money, and Treasury bonds all satisfy investors' demand for a liquid transaction medium and safe store of value. We measure the quantity of these three forms of liquidity and their corresponding liquidity premium over a sample from 1934 to 2016. We empirically...

This study strengthens the frontiers of research on the drivers of dollarization in emerging economies by exploring the case of Ghana using the autoregressive distributed lag modelling framework. The data for the study spanned from January 2002 to March 2016. The evidence suggests that...

This paper derives approximate analytical solutions for various financial assets in the production economy with monetary shocks. Both technology and monetary shocks drive the dynamics of various financial assets. Special cases of permanent and transitory shocks are considered.The solutions based...

The demand for cash balances of financial intermediaries that establish contractual liabilities with credit-sensitive customers is characterized. As stated by Merton, the success of the business activities of such firms crucially depends on their credit quality, and hence, they are obliged to...

Holdings of money and illiquid assets are likely to be determined jointly. Therefore, frictions that give rise to a need for money may affect capital formation, resulting in either too much or too little investment. Existing models of money and capital however tend to overlook that both types of...

This paper reveals the degree of integration of financial markets in selected ASEAN economies. Few studies on this topic provide evidence that integration of the region's financial markets remains limited, despite the steady growth of intra-ASEAN trade (the share of intra-ASEAN trade to total...