Search, Bargaining, Money and Prices: Recent Results and Policy Implications
Recently, the search-theoretic approach to monetary economics has been generalized to incorporate bilateral bargaining theory in order to determine the purchasing power of money endogenously (the first-generation of models in this literature essentially assume that prices are fixed exogenously). The authors review these results. They then use the model to address a variety of issues in monetary economics. The authors analyze the relationships between monetary and real variables, including velocity, output, and welfare. They also discuss several aspects of monetary policy, including the effects of randomness in the money supply process. Copyright 1993 by Ohio State University Press.
Volume (Year): 25 (1993)
Issue (Month): 3 (August)
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