I present a general equilibrium model in which the financial sector employs too many productive inputs. Intermediation is similar, in some ways, to the creation of counterfeit money: a producer can increase the amount of money in his hands at some real cost, but this is socially wasteful as it...

This paper presents a model in which safe assets are systemic because they are the medium of exchange for risky assets. It connects the literature from banking and finance on safe assets to the monetary literature on alternative monetary systems involving commodity money, interest bearing money,...

This paper presents a model in which safe assets are systemic because they are the medium of exchange for risky assets. Like commodity money, these assets are costly to produce and have some intrinsic value, resulting in (a) non-neutrality and (b) overproduction. Quantitatively, the welfare...

Monetary Economics and Sequential Trade is an insightful introduction to the advanced topics in monetary economics. Accessible to students who have mastered the diagrammatic tools of economics, it discusses real issues with a variety of modeling alternatives, allowing for a direct comparison of...