Models of the exchange process based on search theory can be used to analyze the features of objects that make them more or less likely to emerge as ``money'' in equilibrium. These models illustrate the trade--off between endogenous acceptability (an equilibrium property) and intrinsic...

Multiperson households are less reliant on cash than single people because they are more likely than singles to rely on home-based production to meet their daily needs. This conclusion, supported by recent empirical research, suggests that fiscal and monetary policies that make market-based...

We study models of credit with limited commitment, which implies endogenous borrowing constraints. We show that there are multiple stationary equilibria, as well as nonstationary equilibria, including some that display deterministic cyclic and chaotic dynamics. There are also stochastic...

We study economies with an essential role for liquid assets in transactions. The model can generate multiple stationary equilibria, across which asset prices, market participation, capitalization, output and welfare are positively related. It can also generate a variety of nonstationary...

We study bilateral exchange, both direct trade, and indirect trade that happens through chains of intermediaries, or middlemen. We develop a model of this activity and present a sequence of applications. We illustrate how, and how many, intermediaries get involved, and how the terms of trade are...

Housing, in addition to providing direct utility, facilitates credit transactions when home equity serves as collateral. We document big increases in home-equity loans coinciding with the start of the house-price boom, and suggest an explanation. When it is used as collateral, housing can bear a...