A unified framework for monetary theory and policy analysis

Ricardo Lagos () and Randall Wright ()

No 211, Working Paper from Federal Reserve Bank of Cleveland

Abstract: Search-theoretic models of monetary exchange are based on explicit descriptions of the frictions that make money essential. However, tractable versions usually have strong assumptions that make them ill suited for discussing some policy questions, especially those concerning changes in the money supply. Hence, most policy analysis uses reduced-form models. The authors propose a framework, designed to help bridge this gap, that is based explicitly on microeconomic frictions, but allows for interesting macroeconomic policy analyses. At the same time, the model is analytically tractable and amenable to quantitative analysis.

Keywords: Money theory; Monetary policy (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-dge and nep-mon
Date: 2002
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Related works:
Working Paper: A unified framework for monetary theory and policy analysis (2004)
Journal Article: A Unified Framework for Monetary Theory and Policy Analysis (2005)
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