Berentsen, Aleksander; Rocheteau, Guillaume - In: Contributions in Macroeconomics 3 (2003) 1
This paper studies the validity of the Friedman rule in a search model with divisible money and divisible goods in … the one emphasized in the labor-market literature. Buyers cannot obtain the full return that an additional unit of money … provides to the match, which makes the purchasing power of money inefficiently low in equilibrium. Consequently, even though …
