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 analyze money and credit as competing payment instruments in decentralized
exchange. In natural environments, we show the economy does not need both: if credit is …

We study the Lagos and Wright (2005) model of monetary exchange in the laboratory. With a
finite population of sufficiently patient agents, this model has a unique monetary equilibrium …

By declaring an item legal tender or making it publicly receivable, governments might
generate sufficient demand to determine the medium of exchange. How do private actors …

Can there be too much trading in financial markets? We construct a dynamic general
equilibrium model, where agents face idiosyncratic liquidity shocks. A financial market …

Recent years have witnessed the advances of e-money systems such as Bitcoin, PayPal
and various forms of stored-value cards. This paper adopts a mechanism design approach …

We evaluate the Friedman rule for optimal monetary policy in a laboratory economy based
on Lagos–Wright (Journal of Economic Theory 145 (2010), 1508–24). We explore two …

We study a microfounded search model of exchange in the laboratory. Using a within-
subjects design, we consider exchange behavior with and without an intrinsically worthless …

We study asset pricing within a general equilibrium model where unsecured credit is ruled
out, and a real asset helps agents carry out mutually beneficial transactions by serving as …

In this paper we measure the effect of the inflation tax on economic activity and welfare
within a controlled setting. To do so, we develop a model of price posting and monetary …