Download Tópicos de Macroeconomía: Economía Monetaria

Tópicos de Macroeconomía:
Economía Monetaria
Segundo Trimestre 2012
Profesores: Enrique Kawamura y Javier García Cicco
Horario de Clases:
Jueves 9:00 - 12:00
Horas de consulta
Los horarios son a convenir con los profesores directamente; contactarse por e-mail.
Introducción
Este curso presenta tópicos varios en economía monetaria y bancaria. La mayor parte
del contenido de esta materia está incluida en cursos homónimos de programas de Ph.
D. en Estados Unidos. El curso comienza por demostrar la redundancia del dinero en
economías sin fricciones. Luego se introducen tres frmas de modelación de dinero en
equilibrio general que apela a distintos tipos de fricciones: costos de transacción, cashin-advance y modelos de búsqueda. Veremos algunas aplicaciones de estos modelos al
campo de política monetaria, como así también a la relación entre inflación y precios
de activos financieros. Luego se estudiará el modelo de generaciones superpuestas
para explicar al dinero como reserva de valor. Como principal extensión se estudiará
un modelo monetario que incluye un sistema bancario. Luego se pasará a explicar un
tópico importante en economía bancaria, el problema del bank lending channel.
Finalmente se realizará una introducción a la teoría fiscal de los precios.
Bibliografía básica
No adoptaremos ningún texto en particular para toda la materia. En el programa de
contenidos se introducen los corrrespondientes papers, o capítulos de libros.
Evaluación
El sistema de evaluación basará en la entrega por parte de cada estudiante individual
de un artículo final tipo paper que realice algún tipo de contribución dentro de alguna
de las literaturas vistas en el curso o combinaciones de ellas. La contribución puede ser
de índole teórico (en cuyo caso deberá tenerse en cuenta que sea una contribución
verdaderamente original) o, especialmente, una aplicación al caso argentino o de otro
país latinoamericano (especialmente utilizando material en el que se combina la teoría
con métodos cuantitativos o econométricos). Este último tipo de artículo tiene especial
valor ya que una buena parte de la literatura cubierta en este curso ha tenido
contrapartes empíricas para países desarrollados o en desarrollo pero de directo
interés a países desarrollados (como México) pero prácticamente nula ha sido la
aplicación para Argentina (salvo en el caso de los temas del punto 6). El paper no
debiera tener más de veinte páginas (incluyendo referencias).
Syllabus
NOTA: Las referencias marcadas con dos asteriscos (**) corresponden al mínimo
material que se planea cubrir en clase. Referencias con un asterisco (*) corresponden
a material cuya probabilidad de cobertura en clase es positiva pero no uno. De todos
modos la lista es mucho más extensa para proveer al alumnado de la máxima
cantidad de referencias de alto impacto en cada literatura disponibles al momento
de cursar la materia.
1. Rol del dinero en equilibrio: introducción.
La irrelevancia del dinero en equilibrio general walrasiano (con mercados completos). Rol del dinero:
medio de cambio, reserva de valor: necesidad de introducción de fricciones para explicar tales roles.
Bibliografía.

Ljungqvist, Lars and Thomas Sargent (2004). Recursive Macroeconomic Thoery MIT Press,
Cambridge, MA, capítulo 24
2. Modelo elemental de costos de inventarios.
Modelo de costos de inventarios (basado en Baumol-Tobin): modelo base, caracterización del equilibrio.
Aplicaciones: la desagradable aritmética monetarista, operaciones de mercado abierto, cantidad óptima
de dinero, indeterminación del tipo nominal de cambio.
Bibliografía.

Alvarez, Fernando, Andrew Atkeson and Chris Edmond (2007). "Sluggish Responses of Prices
and Inflation to Monetary Shocks in an Inventory Model of Money Demand." Quarterly Journal
of Economics 124, pp. 911-967.

(*) Alvarez, Fernando and Franceso Lippi (2009) "Financial Innovation and the Transactions
Demand for Cash" Econometrica 77, pp. 363-402.

Baumol, William (1952) "The Transactions Demand for Cash: An Inventory Theoretic
Approach." Quarterly Journal of Economics 66: 545-556.

Lippi, Franceso and Alessandro Secchi (2009). "Technological change and the households’
demand for currency." Journal of Monetary Economics 56, pp. 222-230

(**) Ljungqvist, Lars and Thomas Sargent (2004). Recursive Macroeconomic Theory MIT Press,
Cambridge, MA, capítulo 24.

Sargent, Thomas and Neil Wallace (1981). "Some Unpleasant Monetarist Arithmetic." Federal
Reserve Bank of Minneapolis Quarterly Review 5: 1–17.

Tobin, James (1956) "The Interest-Elasticity of Transactions Demand For Cash." The Review of
Economics and Statistics 38: 241-247
3. Modelos de cash-in-advance.
Modelo de cash-in-advance básico: el dinero modelado como medio de compra obligatorio. Precios de
bonos y acciones en contextos inflacionarios. Modelos de cash-in-advance con dos países: tipo nominal
de cambio en regímenes cambiaros flotantes, aplicaciones a mercados cambiarios futuros y a término.
Bibliografía.

Alvarez, Fernando, Andrew Atkeson and Patrick Kehoe (2002). "Money, Interest Rates, and
Exchange Rates with Endogenously Segmented Markets." Journal of Political Economy 110: 73112

Alvarez, Fernando, Andrew Atkeson and Patrick Kehoe (2009). "Time‐Varying Risk, Interest
Rates, and Exchange Rates in General Equilibrium". Review of Economic Studies 76: 851-858.

(**) Altug, Sumru y Pamela Labadie (1994). Dynamic Choice and Asset Markets, Academic
Press, capítulo 5, secciones 1, y capítulo 6, secciones 1 y 3.

Carlstrom, Charles and Timothy Fuerst (1995). "Interest rate rules vs. money growth rules a
welfare comparison in a cash-in-advance economy." Journal of Monetary Economics 36: 247267

(*) Cooley, Thomas and Gary Hansen (1989). "The Inflation Tax in a Real Business Cycle
Model." American Economic Review 79: 733-748

Fuerst, Timothy (1992). "Liquidity, loanable funds, and real activity." Journal of Monetary
Economics 29: 3-24.

Grilli, Vittorio and Nouriel Roubini (1996). "Liquidity models in open economies: Theory and
empirical evidence."European Economic Review 40: 847-859.

(**) Lucas, Robert (Jr) (1982). "Interest Rates and Currency Prices in a Two - Country
World", Journal of Monetary Economics, 10, 335-359.

Lucas, Robert (Jr) (1984). "Money in a Theory of Finance." Carnegie-Rochester Conference
Series on Public Policy21: 9-45.

(*) Lucas, Robert (Jr) (1990). "Liquidity and Interest Rates", Journal of Economic Theory, 50,
237-264

Lucas, Robert (Jr) and Nancy Stokey (1987). "Money and Interest in a Cash-In-Advance
Model." Econometrica 55: 491-513

Ostroy, Joseph and Ross Starr (1990). "The transactions role of money". In Benjamin M.
Friedman and Frank H. Hahn (eds.). Handbook of Monetary Economics, Volume 1, Elsevier, pp
3-62.

Schlagenhauf, Don and Jeffrey Wrase (1995). "Liquidity and real activity in a simple open
economy model." Journal of Monetary Economics, 35, 431-461.

(**) Svensson, Lars (1985). "Money and Asset Prices in a Cash-in-Advance Models." Journal of
Political Economy 93: 919-944

Svensson, Lars (1985). "Currency Prices, Terms of Trade, and International Interest Rates: A
General Equilibrium Asset-Pricing, Cash-in-Advance Approach." Journal of International
Economics 18: 17-42.

Williamson, Stephen D. (1996). "Sequential markets and the suboptimality of the Friedman
rule". Journal of Monetary Economics 37, pp. 549-572.
4. Modelo de generaciones superpuestas
Estructura samuelsoniana de generaciones superpuestas. El ejemplo de Shell (1971) para mostrar
ineficiencia del equilibrio sin dinero. Criterio de Balasko y Shell de optimalidad del equilibrio monetario.
Aplicaciones: el problema de la trampa de alta inflación, indeterminación del tipo nominal de cambio
(Kareken y Wallace), profecías autocumplidas y volatilidad cambiaria excesiva; modelo con bancos.
Bibliografía.

Balasko, Yves and Karl Shell (1980). "The Overlapping-Generations Model, I: The Case of Pure
Exchange Without Money", Journal of Economic Theory23, pp. 281-306

(**) Balasko, Yves and Karl Shell (1981). "The Overlapping-Generations Model, II: The Case of
Pure Exchange With Money", Journal of Economic Theory 24, pp. 112-142

Brock, William (1990). "Overlapping Generations Models with Money and Transaction Costs". In
Benjamin Friedman and Frank Hahn (eds). Handbook of Monetary Economics, Vol I.
Netherlands. Elsevier, pp. 263-295.

Ghiglino, Christian and Karl Shell (2000). "The Economic Effects of Restrictions on Government
Budget Deficits",Journal of Economic Theory 94, pp. 106-137.

(*) Gottardi, Piero (1994). "On the Non-Neutrality of Money with Incomplete Markets." Journal
of Economic Theory 62, pp. 209-220.

Gottardi, Piero (1996). "Stationary Monetary Equilibria in Overlapping Generations Models with
Incomplete Markets."Journal of Economic Theory 71, pp. 75-89.

Kareken, Jonh and Neil Wallace (1981). "On the Indeterminacy of Equilibrium Exchange
Rates", Quarterly Journal of Economics 96, pp. 207-222.

(**) Ljungqvist, Lars and Thomas Sargent (2004). Recursive Macroeconomic Thoery MIT Press,
Cambridge, MA, capítulo 9.

Manuelli, Rodolfo (1990). "Existence and Optimality of Currency Equilibrium in Stochastic
Overlapping Generations Models: The Pure Endowment Case." Journal of Economic Theory 51,
pp. 268-294

(*) Manuelli, Rodolfo and James Peck (1990). "Exchange Rate Volatility in an Equilibrium Asset
Pricing Model",International Economic Review 31, pp. 559-574

(*) Peck, James (1988). "On the Existence of Sunspot Equilibria in an Overlapping Generations
Model." Journal of Economic Theory 44, pp. 19-42

Peled, Dan (1984). "Stationary Pareto Optimality of Stochastic Asset Equilibria with Overlapping
Generations."Journal of Economic Theory 34, pp. 396-403

(**) Shell, Karl (1971). "Notes on the Economics of Infinity", Journal of Political Economy 79, pp.
1002-1011.

Spear, Stephen (1985). "Rational Expectations in the Overlapping Generations Models." Journal
of Economic Theory35, pp. 251-275

Spear, Stephen (1988). "Existence and Local Uniqueness of Functional Rational Expectations
Equilibria in Dynamic Economic Models." Journal of Economic Theory 44, pp. 124-155

Spear, Stephen and Sanjay Srivastava (1986). "Markov Rational Expectations Equilibria in an
Overlapping Generations Model. " Journal of Economic Theory 38, pp. 35-62

Spear, Stephen, Sanjay Srivastava and Michael Woodford (1990). "Indeterminacy of Stationary
Equilibrium in Stochastic Overlapping Generations Models." Journal of Economic Theory 50, pp.
265-284
5. Modelos de búsqueda de primera y segunda generación.
Endogeneización del dinero como medio de pago en equilibrio. Los primeros modelos: Diamond tyy
Kiyotaki-Wright. El problema del cómputo del equilibrio y de la multiplicidad de equilibrios. Fijación de
precios en el modelo de primera generación. La "solución" de Lagos y Wright (modelos de segunda
generación): los modelos "neo-monetaristas". Política monetaria óptima en modelos de búsqueda de
segunda generación. Búsqueda y rigidez endógena de precios.
Bibliografía.

Aiyagari, Rao, Neil Wallace and Randall Wright (1996). "Coexistence of Money and Interest
Bearing Securities."Journal of Monetary Economics 37, pp. 397-420.

Coles, Melvyn G. and Randall Wright (1998).
"A Dynamic Equilibrium Model of Search, Bargaining, and Money."Journal of Economic
Theory 78, pp. 32-54

Corbae, Dean, Ted Temzelides and Randall Wright (2003). "Directed Matching and Monetary
Exchange."Econometrica 71, pp. 731-756.

Curtis, Elisabeth and Randall Wright (2004).
"Price setting, price dispersion, and the value of money: or, the law of twoprices." Journal of
Monetary Economics 51, pp. 1599-1621.

Deviatov, Alexei and Neil Wallace (2009). "A Model in Which Monetary Policy Is about
Money." Journal of Monetary Economics 56, pp. 283-288.

Ennis, Huberto (2004). "Macroeconomic Fluctuations and Bargaining." Journal of Economic
Theory 115, pp. 322-340.

(*) Ennis, Huberto (2008). "Search, Money, and Inflation under Private Information." Journal
of Economic Theory 138, pp. 101-131.

Guerrieri, Veronica and Guido Lorenzoni (2009). "Liquidity and Trading
Dynamics." Econometrica 77, pp. 1751-1790.

He, Ping, Lixin Huang and Randall Wright (2008). "Money, Banking and Monetary
Policy." Journal of Monetary Economics 55, pp. 1013-1024.

Head, Allen, Lucy Qian Lu, Guido Menzio and Randall Wright (2011). "Sticky Prices: A New
Monetarist Approach." NBER Working Paper 17520

Hu, Tai-wei, John Kennan and Neil Wallace (2009). "Coalition-Proof Trade and the Friedman
Rule in the Lagos-Wright Model." Journal of Political Economy 117, pp. 116-137.

Jean, Kasie, Stanislav Rabinovich and Randall Wright (2011). "On Multiplicity of Monetary
Equilibria: Green-Zhou Meets Lagos Wright." Journal of Economic Theory, in press.

Lee, Manjong, Neil Wallace and Tao Zhu (2005). "Modeling Denomination
Structures." Econometrica 73, pp. 949-960.

Katzman, Brett, John Kennan and Neil Wallace (2003). "Output and Price Level Effects of
Monetary Uncertainty in a Matching Model." Journal of Economic Theory 108, pp. 217-255

(*) Kiyotaki, Nobuhiro and Randall Wright (1989). "On Money as a Medium of
Exchange", Journal of Political Economy 97, pp. 927-954

Kiyotaki, Nobuhiro and Randall Wright (1991). "A Contribution to the Pure Theory of
Money". Journal of Economic Theory 53, pp. 215-235

(**) Kiyotaki, Nobuhiro and Randall Wright (1993). "A Search-Theoretic Approach to Monetary
Economics", American Economic Review 83, pp. 66-77

(*) Kocherlakota, Narayana (1998). "Money is Memory." Journal of Economic Theory 81, pp.
232-251

Kocherlakota, Narayana amd Neil Wallace (1998). "Incomplete Record-Keeping and Optimal
Payment Arrangements."Journal of Economic Theory 81, pp. 272-289

Lagos, Ricardo (2010). "Some results on the optimality and implementation of the Friedman
rule in the Search Theory of Money." Journal of Economic Theory 145, pp. 1508-1524

(*) Lagos, Ricardo (2011). "Asset Prices, Liquidity, and Monetary Policy in an Exchange
Economy." Journal of Money, Credit and Banking 43, pp. 521-552

Lagos, Ricardo and Guillaume Rocheteau (2008). "Money and capital as competing media of
exchange." Journal of Economic Theory 142, pp. 247-258

Lagos, Ricardo and Randall Wright (2003). "Dynamics, Cycles and Sunspot Equilibria in
Genuinely Dynamic, Fundamentally Disaggregative Models of Money." Journal of Economic
Theory 109, pp. 156-171

(**) Lagos, Ricardo and Randall Wright (2005). "A Unified Framework for Monetary Theory and
Policy Analysis",Journal of Political Economy 113, pp. 463-484.

Li, Yiting and Randall Wright (1998).
"Government Transaction Policy, Media of Exchange, and Prices." Journal of Economic
Theory 81, pp. 290-313

Rocheteau, Guilleume and Randall Wright (2005). "Money in Competitive Equilibrium, in Search
Equilibrium, and in Competitive Search Equilibrium." Econometrica 73, pp. 175-202

Rupert, Peter, Martin Schindler and Randall Wright (2001). "Generalized searchtheoretic models of monetaryexchange." Journal of Monetary Economics 48, pp. 605-622.

(*) Trejos, Alberto and Randall Wright (1997). "Search, Bargaining, Money and Prices." Journal
of Political Economy103, pp. 118-141

Irina A. Telyukova and Randall Wright (2008). "A Model of Money and Credit, with Application
to the Credit Card Debt Puzzle." Review of Economic Studies 75, pp. 629-647.

Temzelides, Ted and Stephen Williamson (2001). "Payments Systems Design in Deterministic
and Private Information Environments." Journal of Economic Theory 99, pp. 297-326.

Wallace, Neil (1997). "Short-Run and Long-Run Effects of Changes in Money in a Random
Matching Model". Journal of Political Economy 105, pp. 1293-1307

Wallace, Neil (2011). "The Mechanism-Design Approach to Monetary Theory." In Benjamin
Friedman and Michael Woodford (eds.). Handbook of Monetary Economics, Vol
3A. Amsterdam. Elsevier, pp. 3-24.

Wallace, Neil and Tao Zhu (2004). "A Commodity Money Refinement in Matching
Models." Journal of Economic Theory 117, pp. 246-258

Wallace, Neil and Tao Zhu (2007). "Pairwise Trade and Coexistence of Money and Higher
Return Assets.” Journal of Economic Theory 133, pp. 524-535

Williamson, Stephen (2003). "Payments systems and monetary policy." Journal of Monetary
Economics 50, pp. 475-495.

Williamson, Stephen (2008). "Monetary policy and distribution." Journal of Monetary
Economics 55, pp. 1038-1053.

Williamson, Stephen and Randall Wright (1994). "Barter and Monetary Exchange under Private
Information." American Economic Review 84, pp. 104-123

Williamson, Stephen and Randall Wright (2011). "New Monetarist Economics: Models." In
Benjamin Friedman and Michael Woodford (eds.). Handbook of Monetary Economics, Vol
3A. Amsterdam. Elsevier, pp. 25-96.
6. Modelos para análisis de política monetaria (I): precios pegajosos en equilibrio general en mercados
con competencia monopolística en economías abiertas.
Modelos canónicos de precios pegajosos con competencia monopolística: esquema básico, costos de
ajuste de precios y el esquema de Calvo. Modelos con imperfecciones en el financiamiento de
"capitalistas". Aplicaciones: análisis de optimalidad de regímenes monetarios y cambiarios.
Bibliografía.

Alvarez, Fernando, Franceso Lippi and Luigi Paciello (2011). "Optimal Price Setting With
Observation and Menu Costs." Quarterly Journal of Economics 126, pp. 1909-1960.

Benigno, Gianluca and Pierpaolo Benigno (2003). "Price Stability in Open Economies." Review of
Economic Studies70, pp. 743-764.

Benigno, Gianluca and Pierpaolo Benigno (2006). "Designing targeting rules for international
monetary policy cooperation." Journal of Monetary Economics 53, pp. 473-506

Benigno, Pierpaolo (2002). "A simple approach to international monetary policy
coordination." Journal of International Economics 57, pp. 177-196

Benigno, Pierpaolo (2004). "Optimal monetary policy in a currency area." Journal of
International Economics 63, pp. 293-320

Benigno, Pierpaolo and Luca Antonio Ricci (2011). "The Inflation-Output Trade-Off with
Downward Wage Rigidities."American Economic Review 101, pp. 1436-1466

Betts, Caroline and Michael Devereux (2000). "Exchange Rate Dynamics in a Model of Pricing to
Market''. Journal of International Economics 50, pp. 215-244

Céspedes, Luis, Roberto Chang y Andrés Velasco (2004). "Balance Sheets and Exchange Rate
Policy", American Economic Review 64, pp. 503-519.

Christiano, Lawrence, Mathias Trabandt and Karl Walentin (2011). "DSGE Models for Monetary
Policy Analysis". In Benjamin M. Friedman and Michael Woodford (editors) Handbook of
Monetary Economics, Vol. 3A, Netherlands: Elsevier.

Cook, David and Michael Devereux (2006). "External currency pricing and the East Asian
crisis." Journal of International Economics 69, pp. 37-63

Correia, Isabel , Juan Pablo Nicolini, and Pedro Teles (2008). "Optimal Fiscal and Monetary
Policy: Equivalence Results." Journal of Political Economy 116, pp 141-170

Corsetti, Giancarlo, Luca Dedola and Sylvain Leduc (2008). "High exchangerate volatility and low pass-through."Journal of Monetary Economics 55, pp. 1113-1128.

Corsetti, Giancarlo, Luca Dedola and Sylvain Leduc (2011). "Optimal monetary policy in open
economies." In Benjamin Friedman and Michael Woodford (eds.). Handbook of Monetary
Economics, Vol 3B. Amsterdam. Elsevier, pp. 861-934.

Corsetti, Giancarlo and Paolo Pesenti (2001). "Welfare and macroeconomic
interdependence." Quarterly Journal of Economics 116, pp 421-445

Corsetti, Giancarlo and Paolo Pesenti (2005). "International dimensions of optimal monetary
policy." Journal of Monetary Economics 52, pp. 281-305.

Devereux, Michael and Charles Engel (2003) "Monetary Policy in the Open Economy Revisited:
Price Setting and Exchange-Rate Flexibility", Review of Economic Studies 70, pp. 765-783.

Devereux, Michael and Charles Engel (2007). "Expenditure switching versus real exchange rate
stabilization: Competing objectives for exchange rate policy." Journal of Monetary
Economics 54, pp. 2346-2374

Devereux, Michael, Charles Engel and Peter Storgaard (2004). "Endogenous Pass-through when
Nominal Prices are set in Advance''. Journal of International Economics 63, pp. 263-291

Devereux, Michael and Philip Lane (2003). "Understanding Bilateral Exchange Rate
Volatility." Journal of International Economics 60, pp. 109-132

Devereux, Michael, Kang Shi and Juanyi Xu (2007).
"Global monetary policy under a dollar standard." Journal of International Economics 71, pp.
113-132

Devereux, Michael and Alan Sutherland (2008). "Financial Globalization and Monetary
Policy." Journal of Monetary Economics 55, pp. 1363-75.

(**) Galí, Jordi (2008). Monetary Policy, Inflation and the Business Cycle. Princeton University
Press (el capítulo que se estudiará es el 3, aunque se recomienda la lectura de todo el libro).

Galí, Jordi y Tommaso Monacelli (2005). "Monetary Policy and Exchange Rate Volatility in a
Small Open Economy",Review of Economic Studies 72, 707-734

Obstfeld, Maurice y Kenneth Rogoff (1995). "Exchange Rate Dynamics Redux'', Journal of
Political Economy 103, pp 624-660.

Obstfeld, Maurice y Kenneth Rogoff (2000). "New directions for stochastic open economy
models", Journal of International Economics 50, pp. 117 - 153

Ravn, Morten, Stephanie Schmitt-Grohé and Martín Uribe (2012). "Consumption, government
spending, and the real exchange rate." Journal of Monetary Economics 59, pp. 215-234.

(**) Schmitt-Grohé, Stephanie, “Lecture Notes on Monetary Theory and Policy”, (Ch. 6).

Schmitt-Grohé, Stephanie and Martín Uribe (2003). "Closing Small Open Economy
Models." Journal of International Economics 61, pp. 163 - 185

(*) Schmitt-Grohé, Stephanie and Martín Uribe (2004). "Optimal Fiscal and Monetary Policy
Under Sticky Prices."Journal of Economic Theory 114, pp. 198-230

Schmitt-Grohé, Stephanie and Martín Uribe (2007). "Optimal Simple and Implementable
Monetary and Fiscal Rules."Journal of Monetary Economics 54, pp. 1702-1725.

Schmitt-Grohé, Stephanie and Martín Uribe (2006). “Comparing Two Variants of Calvo-Type
Wage Stickiness.” NBER WP 12740

Woodford, Michael (2003). Interest and Prices: Foundations of a Theory of Monetary
Policy." Princeton University Press.

Woodford, Michael (2011). "Optimal Monetary Stabilization Policy." In Benjamin Friedman and
Michael Woodford (eds.). Handbook of Monetary Economics, Vol 3B. Amsterdam. Elsevier, pp.
723.-828.
7. Modelos para análisis de política monetaria (II): modelos de generaciones superpuestas con sistema
bancario.
Modelos con sistema bancario: esquema básico de "islas" y demanda por liquidez. Variantes: shocks
agregados de liquidez. Banco central como proveedor de liquidez. Variante con mercados financieros
(con participación restringida) y shocks de solvencia. Distinción de roles de bancos privados, mercados
financieros y banco central.
Bibliografía.

(*) Antinolfi, Gaetano , Elisabeth Huybens and Todd Keister (2001). "Monetary Stability and
Liquidity Crises: The Role of the Lender of Last Resort." Journal of Economic Theory 99, pp. 187219.

(**) Antinolfi, Gaetano and Enrique Kawamura (2008). "Banks and markets in a monetary
economy." Journal of Monetary Economics 55, pp. 321-334

Bhattacharya, Joydeep, Joseph Haslag and Steven Russell (2005). "The role of money in two
alternative models: When is the Friedman rule optimal, and why?" Journal of Monetary
Economics 52, pp. 1401-1433.

Bullard, James and Bruce Smith (2003). "Intermediaries and payments instruments." Journal of
Economic Theory109, pp. 172-197

(**) Champ, Bruce, Bruce Smith and Stephen Williamson (1996). "Currency Elasticity and
Banking Panics: Theory and Evidence." The Canadian Journal of Economics 29, pp. 828-864

Freeman, Scott (1996). "The Payments System, Liquidity, and Rediscounting." American
Economic Review 86, pp. 1126-1138

Freeman, Scott (1999). "Rediscounting under aggregate risk." Journal of Monetary
Economics 43, pp. 197-216

Schreft, Stacey L. and Bruce D. Smith (1997). "Money, Banking, and Capital Formation." Journal
of Economic Theory73, pp. 157-182

Schreft, Stacey L. and Bruce D. Smith (1998). "The Effects of Open Market Operations in a
Model of Intermediation and Growth." Review of Economic Studies 65, pp. 519-550

Schreft, Stacey L. and Bruce D. Smith (2000). "The evolution of cash transactions: Some
implications for monetary policy." Journal of Monetary Economics 46, pp. 97-120

Smith, Bruce D. (2000). "Monetary Policy, Banking Crises, and the Friedman Rule." American
Economic Review, Papers and Proceedings 92, pp. 128-134

Williamson, Stephen D. (2003). "Payments systems and monetary policy". Journal of Monetary
Economics 50, pp. 475-495