Limited participation and the neutrality of money

Money

Private money and counterfeiting

Money supply ; Banks and banking

Payments Systems with Random Matching and Private Information

A model of dynamic risk sharing is constructed where agents meet pairwise and at random, and there is private information about endowments. Risk sharing is accomplished through dynamic contracts involving credit transactions, and through monetary exchange. A Friedman rule is optimal, and solutions are computed. The welfare costs of inflation and the effects of inflation on the distribution of consumption and wealth are small for an economy calibrated to U.S. data. However, these effects are large when the credit system is relatively unsophisticated.97-21

New Keynesian economics : a monetary perspective

In this article we construct a simple analytically tractable model to explore and evaluate New Keynesian ideas. First, we show that a New Keynesian model need not exhibit Phillips curve correlations in the absence of strategic price setting by firms. Second, we conclude that New Keynesian economics needlessly neglects monetary frictions and misses out on some key insights in the process. For example, it is important to understand how the central bank should manipulate monetary quantities to support particular nominal interest rate rulesEconomics ; Monetary theory

Recent developments in modeling financial intermediation

Financial institutions ; Money theory

Bank failures, financial restrictions, and aggregate fluctuations: Canada and the United States, 1870-1913

During 1870_1913, Canada had a well-diversified branch banking system while banks in the U.S. unit-banking system were less diversified. Canadian banks could issue large-denomination notes with no restrictions on their backing, while all U.S. currency was essentially an obligation of the U.S. government. Also, experience in the two countries with regard to bank failures and panics was quite different. A general equilibrium business cycle model with endogenous financial intermediation is constructed that captures these historical Canadian and American monetary and banking arrangements as special cases. The model's predictions contradict conventional wisdom about the cyclical effects of banking panics. Support for these predictions is found in aggregate annual time series data for Canada and the United States.Bank failures ; Banks and banking - History ; Canada

Transactions, Credit, and Central Banking in a Model of Segmented Markets

A segmented markets model is constructed in which transactions are conducted using credit and currency. Goods market segmentation plays an important role, in addition to the role played by conventional segmentation of asset markets. An important novelty of the paper is to show how the diffusion of a money injection by the central bank depends not only on the interaction of agents in exchanging money for goods, but on the arrangements for clearing and settlement of credit instruments. The model permits open market operations, daylight overdrafts, reserve-holding, and overnight lending and borrowing, allowing us to consider a rich array of central banking arrangements and their implicationsMoney, Segmented Markets, Credit, Central Banking

Monetary Policy and Distribution

monetary policy, monetary theory, Friedman rule, money neutrality

Joint angle affects volitional and magnetically-evoked neuromuscular performance differentially

This study examined the volitional and magnetically-evoked neuromuscular performance of the quadriceps femoris at functional knee joint angles adjacent to full extension. Indices of volitional and magnetically-evoked neuromuscular performance (N= 15 healthy males; 23.5 ± 2.9 years; 71.5 ± 5.4 kg; 176.5 ± 5.5 cm) were obtained at 25°; 35° and 45° of knee flexion. Results showed that volitional and magnetically-evoked peak force (PFV; PTFE, respectively) and electromechanical delay (EMDV; EMDE, respectively) were enhanced by increased knee flexion. However, greater relative improvements in volitional compared to evoked indices of neuromuscular performance were observed with increasing flexion from 25° to 45° (e.g. EMDV; EMDE: 36% vs. 11% improvement, respectively; F[2,14] = 6.8; p < 0.05). There were no significant correlations between EMDV and EMDE or PFV and PTFE, respectively at analogous joint positions. These findings suggest that the extent of the relative differential between volitional and evoked neuromuscular performance capabilities is joint angle-specific and not correlated with performance capabilities at adjacent angles, but tends to be smaller with increased flexion. As such, effective prediction of volitional from evoked performance capabilities at both analogous and adjacent knee joint positions would lack robustness