Introduction to modeling money and studying monetary policy

Article Abstract:

Nine papers on monetary policy and theory presents a pattern of differences on how money is modeled in terms of the varieties of monetary policies each model pertains to. Five of the papers study the effects of the rate of growth of money from lump-sum taxes and transfers. Papers presented include money as memory, a random-matching model with divisible money and prices, incomplete record-keeping and optimal payment, government transaction policy, a monetary propagation mechanism, financial market frictions, price level volatility, expectation traps and recursive approaches on modeling credible monetary policy.

Econometrics & Model Building, Econometrics, Business models

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Government transaction policy, the medium of exchange, and welfare

Article Abstract:

A model is developed to test the implications of a government's choice of a medium of exchange over another and its attending costs and benefits. The model shows the formation of two steady states, the monetary and the non-monetary, with each state showing the unique action of the exchange medium. Generally, if a government transaction policy is effective in setting a medium of exchange, that policy on its own cannot create a unique steady state. In conditions of decentralized trade, the trade-off seen when the government favors certain objects is also strong.

Economics, Research and Development in the Social Sciences and Humanities, Economic stagnation

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Coexistence of money and interest-bearing securities

Article Abstract:

A random matching model with money is used for the study of the nominal yield on small denomination, bearer, safe and discount securities issued by the government. Findings reveal that transactions are characterized by certain frictions and its application to assets. It is found that there is a steady state with mature securities circulating at par and for certain parameters, another steady state with securities circulating at a discount.

Depository Credit Intermediation, Money Management Accts & Svcs, Interest Rates, Analysis, Evaluation, Securities, Asset management accounts

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