TY  - UNPD
A1  - Camera, Gabriele
A1  - Chien, YiLi
T1  - Two monetary models with alternating markets : [Version 28 October 2013]
T2  - SAFE working paper series ; No. 33
N2  - We present a thought-provoking study of two monetary models: the cash-in-advance and the Lagos and Wright (2005) models. We report that the different approach to modeling money — reduced-form vs. explicit role — neither induces theoretical nor quantitative differences in results. Given conformity of preferences, technologies and shocks, both models reduce to one difference equation. The equations do not coincide only if price distortions are differentially imposed across models. To illustrate, when cash prices are equally distorted in both models equally large welfare costs of inflation are obtained in each model. Our insight is that if results differ, then this is due to differential assumptions about the pricing mechanism that governs cash transactions, not the explicit microfoundation of money.
T3  - SAFE working paper - 33 
KW  - cash-in-advance
KW  - matching
KW  - microfoundations
KW  - money
KW  - inflation
Y1  - 2013
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/32277
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-322775
IS  - Version 28 October 2013
SP  - 1
EP  - 25
PB  - SAFE
CY  - Frankfurt am Main
ER  -