Search, Money and Capital: A Neoclassical Dichotomy, Second Version

33 Pages Posted: 25 Nov 2003

See all articles by S. Borağan Aruoba

S. Borağan Aruoba

University of Maryland - Department of Economics

Randall Wright

University of Wisconsin - Madison - Department of Finance, Investment and Banking; Federal Reserve Banks - Federal Reserve Bank of Minneapolis

Date Written: September 3, 2003

Abstract

Recent work has reduced the gap between search-based monetary theory and mainstream macroeconomics by incorporating into the search model some centralized markets as well as some decentralized markets where money is essential. This paper takes a further step towards this integration by introducing labor, capital and neoclassical firms. The resulting framework nests the search-theoretic monetary model and a standard neoclassical growth model as special cases. Perhaps surprisingly, it also exhibits a dichotomy: one can determine the equilibrium path for the value of money independently of the paths of consumption, investment and employment in the centralized market.

Note: A previous version of this paper can be found at: http://ssrn.com/abstract=337160

JEL Classification: D83, E31

Suggested Citation

Aruoba, S. Boragan and Wright, Randall D., Search, Money and Capital: A Neoclassical Dichotomy, Second Version (September 3, 2003). Available at SSRN: https://ssrn.com/abstract=470905 or http://dx.doi.org/10.2139/ssrn.470905

S. Boragan Aruoba

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
301-405-3508 (Phone)
301-405-3542 (Fax)

Randall D. Wright (Contact Author)

University of Wisconsin - Madison - Department of Finance, Investment and Banking ( email )

975 University Avenue
Madison, WI 53706
United States
608-263-3860 (Phone)

Federal Reserve Banks - Federal Reserve Bank of Minneapolis

90 Hennepin Avenue
Minneapolis, MN 55480
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
80
Abstract Views
1,582
rank
335,305
PlumX Metrics