Summarizing Hendry's forty years of work on taming uncertainty is "clear and distinct": Test, test, test. Sure - but test what? Test the maintained assumptions of the disturbances. Test the parameter restrictions of a given model. Test the explanatory power of a model against a rival model. In...

Using a general equilibrium search-theoretic model of money, I study the distributional effects of open market operations. In my model, heterogeneous agents trade bilaterally among themselves in a frictional market and save using cash and illiquid short-term nominal government bonds. Wealth...

Low inflation on goods markets provides no reliable precondition for asset-market stability; it might even promote the emergence of bubbles because interest rates and risk premia appear to be low. A further factor driving asset demand is easy availability of credit, which in turn roots in the...