This essay surveys the new monetarist approach to liquidity. Work in this literature strives for
empirical and policy relevance, plus rigorous foundations. Questions include: What is …

We develop a model of the market for federal funds that explicitly accounts for its two
distinctive features: banks have to search for a suitable counterparty, and once they meet …

What determines which assets are used in transactions? We develop a framework where the
extent to which assets are recognizable determines the extent to which they are acceptable …

An asset-pricing model is developed, in which financial assets are valued for their liquidity—
the extent to which they are useful in facilitating exchange—as well as for being claims to …

We develop a model where agents can allocate their wealth between a liquid asset, which
can be used to purchase consumption goods, and an illiquid asset, which represents a …

This study analyzes economies with an essential role for liquid assets in the exchange
process. The model can generate multiple stationary equilibria, across which asset prices …

We develop a theory of the role of assets in the exchange process and use it to study several
issues in macro, monetary, and financial economics, both analytically and quantitatively. Our …

We develop a two-sector search-matching model of the labor market with imperfect mobility
of workers, augmented to incorporate a housing market and a frictional goods market …

This paper studies, analytically and numerically, economies with multiple liquid assets: fiat
currency; fixed-supply real assets; and reproducible capital. Cases are considered where …

How do central bank purchases of illiquid assets affect asset prices and the real economy?
To answer this question, I construct a model with heterogeneous households–some …