The concept of neutral money plays a central role in contemporary macroeconomic theory as an implication of the “classical dichotomy” and is also very much a live issue in recent monetary policy discussion revolving around the notion of a “neutral interest rate.” Modern scholars...

Lucas (1972) was a paper that permanently changed the course of macroeconomics, even though its "money supply surprise" model lost its central place in the area within a decade because of empirical difficulties. However, Lucas's novel methodology, based on clearing markets and rational...

This paper advances a highly tractable model with search theoretic foundations for money and neoclassical growth. In the model, manufacturing and commerce are distinct and separate activities. In manufacturing, goods are efficiently produced combining capital and labor. In commerce, goods are...

Models of monetary expansion, following Friedman (1969), tend to abstract away from the relative price effects of monetary policy by assuming that the central bank distributes money directly to agents via helicopter. However, in light of the recent entertainment of helicopter drops as a...

The scope of this paper is to test the hypothesis of the non-neutrality of money in Brazil since 1980, and try to argue that if the Brazilian Central Bank carries on neglecting the fact that money/inflation can actually be non-neutral in the long-term, monetary policy may well hinder the...

This paper evaluates the effect of a change in the quantity of money on relative prices in the U.S. economy based on quarterly time-series for the period of 1959 to 2013. We also estimate the implication of a change in relative prices on the rate of inflation and macroeconomic variables. The...

Recent monetary models with explicit microfoundations are made tractable by assuming that agents have access to centralized markets after one round of decentralized trade. Given quasi-linear preferences, this makes the distribution of money degenerate - which keeps the models simple but...

Determining the correct monetary aggregate to use is (or at least should be) an important consideration when taking any monetary model to the data. In this paper I present a basic monetary search model with two assets, currency and bonds. I assume that in order for assets to be used in trade,...