Discussion Paper
Liquidity and real activity in three monetary models
Abstract: This paper investigates interest rate determination and evolutions of nominal and real variables in alternative monetary, general equilibrium models. Three approaches to characterizing monetary transactions services are utilized: a cash-in-advance approach, in which agents face cash constraints on goods purchases; a transaction-cost approach, in which goods are sacrificed in transactions; and a shopping-time approach, in which leisure is sacrificed in transactions. Models which employ these approaches are used to examine liquidity effects of monetary innovations on interest rates and real activity.
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Bibliographic Information
Provider: Federal Reserve Bank of Minneapolis
Part of Series: Discussion Paper / Institute for Empirical Macroeconomics
Publication Date: 1992
Number: 68