We extend and apply computable general equilibrium methods to the study of economies
with both aggregate uncertainty and uninsured household-specific uncertainty. In our
economies the government issues two types of assets: a small denomination, non-interest
bearing asset, which we call currency, and a large denomination, interest bearing asset,
which we call T-bills. We find that a real interest rate behavior similar to that observed
in the U.S. can be sustained as equilibrium behavior in our class of economies. We also
find that policy induced real interest rate changes that are perceived as being permanent
have significant real effects and that these effects take a few years to be fully realized
