In this article, the discussion on quality levels in the monetary search theoretical model is extended. By having quality levels endogenously determined, we found that whether money holders have quality preferences is crucial to the results. While the effect of the fraction of money on quality...

We explore the implications of introducing an interest-bearing central bank digital currency (CBDC) through commercial banks that differ in size. Banks of heterogeneous sizes offer different convenience properties to depositors, which the CBDC adopts. The large bank gives depositors a higher...

We explore the implications of introducing a central bank digital currency (CBDC) through commercial banks that differ in size. We focus on two design features of CBDCs: the interest rate and payment convenience. These features correspond to the "store of value" and "medium of exchange"...

This paper proposes a tractable New Keynesian (NK) economy with endogenous adjustment in product quality that nests the canonical framework. Endogenous quality choice reduces the slope of the traditional NK Phillips curve and ampliffes the economy's response to productivity shocks. This leads to...