Search, money and capital: a neoclassical dichotomy
AbstractRecent work has reduced the gap between search-based monetary theory and mainstream macroeconomics by incorporating into the search model some centralized markets as well as some decentralized markets where money is essential. This paper takes a further step towards this integration by introducing labor, capital and neoclassical firms. The resulting framework nests the search-theoretic monetary model and a standard neoclassical growth model as special cases. Perhaps surprisingly, it also exhibits a dichotomy: one can determine the equilibrium path for the value of money independently of the paths of consumption, investment and employment in the centralized market.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Cleveland in its series Working Paper with number 0208.
Date of creation: 2002
Date of revision:
Other versions of this item:
- S. Boragan Aruoba & Randall Wright, 2003. "Search, money, and capital: a neoclassical dichotomy," Proceedings, Federal Reserve Bank of Cleveland, pages 1085-1117.
- NEP-ALL-2002-11-04 (All new papers)
- NEP-DGE-2002-11-04 (Dynamic General Equilibrium)
- NEP-MON-2002-10-27 (Monetary Economics)
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- Ricardo Lagos & Randall Wright, 2002.
"Dynamics, cycles and sunspot equilibria in "genuinely dynamic, fundamentally disaggregative" models of money,"
0210, Federal Reserve Bank of Cleveland.
- Lagos, Ricardo & Wright, Randall, 2003. "Dynamics, cycles, and sunspot equilibria in 'genuinely dynamic, fundamentally disaggregative' models of money," Journal of Economic Theory, Elsevier, vol. 109(2), pages 156-171, April.
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