Money plays a significant role in people’s lives, and yet little experimental attention has been given to the psychological underpinnings of money. We systematically varied whether and to what extent the concept of money was activated in participants’ minds using methods that minimized participants’ conscious awareness of the money cues. On the one hand, participants reminded of money were less...

Only those who have gone too far know where the limits should have been Money served throughout history as a medium of exchange and as a storehouse of value. But when gold and silver coins were replaced by paper currencies, money no longer was the same. Paper money, no longer having intrinsic value, now functions only as a medium of exchange, a function that degrades over time. The value of pap...

Recently there has been renewed interest in coordination problems, and, in particular, in monetary aspects of coordination. This paper attempts to combine important insights developed in the literature on matching models of money (in particular Kiyotaki and Wright [1989], Kocherlakota [1998] and Cavalcanti and Wallace [1999]) with insights from the macroeconomic coordination game-technological ...

This paper considers an economy in which the financial system provides intermediary services for founded and unfounded assets. Founded assets have real investments as underlying, the unfounded assets have not. Money is used for real and financial transactions. In particular, the money supplied to the financial system may be used to honor the payoff promises of unfounded assets rather than being...

We analyze the stability of monetary regimes in an economy where fiat money is endogenously created by the government, information about its value is imperfect, and learning is decentralized. We show that monetary stability depends crucially on the speed of information transmission in the economy. Our model generates a dynamic on the acceptability of fiat money that resembles historical account...

We add inside and outside money to the standard GEI model. If there enough gains to trade via money, then monetary equilibrium (ME) exists and money has positive value, even when GEI fails to exist. The nonexistence of GEI shows up as a liquidity trap in terms of the ME. In sharp contrast to GEI, the ME are generically determinate not only in terms of real, but also financial, variables. © 2003...

A small, structural model of the monetary business cycle implies that real money balances enter into a correctly-specified, forward-looking IS curve if and only if they enter into a correctly-specified, forward-looking Phillips curve. The model also implies that empirical measures of real balances must be adjusted for shifts in money demand to accurately isolate and quantify the dynamic effects...

In this study, we examined the effects of monetary policy shocks on the performance of the Iranian macroeconomy and the banking system, under the different situations of the Basel II and III capital requirements regulations. By developing a DSGE Model and according to its structural shocks, four observable variables including output gap, bank capital adequacy, inflation, and money base growth r...