This paper aims to integrate the money market into structure of economy. The microfoundation is starting point define and general equilibrium mechanism On this basis, research seeks a linking with economic activity in framework. relationships between supply national outcome, inflation, price level are studied three cases: full-employment economy, steady-state sticky-price result explains interr...

A major concern in modern monetary theory has been the development of models where money is essential and yet substantive issues can be analyzed in a tractable manner. At the center of this e¤ort is Lagos and Wright (2005). The tractability in their framework is due to the fact that trade alternates between a centralized market and a decentralized market. A widespread view is that money is esse...

A prediction market is a place where individuals can wager on the outcomes of future events. Those who forecast the outcome correctly win money, and if they forecast incorrectly, they lose money. People value money, so they are incentivized to forecast such outcomes as accurately as they can. Thus, the price of a prediction market can serve as an excellent indicator of how likely an event is to...

HE relationship between the Federal Reserve’s discount rate and money market interest rates continues to be a topic of nuch interest and even more confusion. A significant number’ of money mar-ket analysts and some in public service believe that the discount rate is an iniportant tool through which the Federal Reserve exerts its influence overthe economy — particularly market interest rates. Th...