This paper shows that monetary policy produces real effects in the steady state by impacting banks' liquidity constraint, in the absence of frictions that have been used to generate non-neutrality, such as nominal rigidity and search frictions. Moreover, the effects for different types of banks...

This paper shows that nominal operations move banks' lending rates in steady states by impacting their liquidity constraints, without frictions previously considered, e.g. nominal rigidity and search frictions. Moreover, the effects are heterogeneous. When bank credit is used to make purchase,...

The paper argues that the industrial organization of the financial services market is determined by the allocation of liability to repay investors. Based on the allocation of liability, the paper examines all the possible modes of organizing finance and delegated monitoring in an economy with...

This paper studies non-neutrality of monetary policy incorporating three facts: The majority of media of exchange is not fiat money but bank liability; fiat money is largely used by banks to meet liquidity demand; and banks extensively use government bonds for liquidity management. It finds that...

This paper considers two types of technological change in a unified model. Typ A is unskilled-biased, allowing workers to cheaply produce more. This hurts the least talented workers while possibly benefitting the most talented ones. Together, these technological changes may have contributed to...

This paper studies the implication of banks' money creation and liquidity management for monetary policy. When borrowing fiat money banks use a government bond as collateral, which pays a fixed stream of nominal dividend. A variation in fiat money's quantity alters its unit real value, thereby...

The paper presents a theory that large scales are necessary to establish reputation. In the model, each producer yields one widget and chooses the quality investment each period. Low quality widgets always fail and high quality ones perform with some probability. Due to noisiness of single...

The brand-names are believed to represent the reputation of a firm. However, often it was created long ago by the glories of the members physically unrelated to the firm now. How could it survive the dealth of the founding members? To address this problem, the paper presents an OLG model where...