The paper functionally describes the income velocity of money by including the cost of a key substitute to money: exchange credit. Financial innovation causes the cost of credit to fall, the quantity of money demanded to fall, and the velocity to rise, all without shifting the money demand...

We ask why, in many circumstances and many environments, decision-makers choose to act on a time-regular basis (e.g. adjust every six weeks, etc.) or on a state-regular basis (e.g. change an interest rate by 0.25%, etc.), even though such an approach appears suboptimal. The paper attributes...