STICKY PRICES AND COSTLY CREDIT

• 成果类型: Article
• 署名作者: Wang, Liang; Wright, Randall; Liu, Lucy Qian
• 署名单位: University of Hawaii System; University of Hawaii Manoa; Zhejiang University; University of Wisconsin System; University of Wisconsin Madison; Federal Reserve System - USA; Federal Reserve Bank - Minneapolis; International Monetary Fund
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12416
• 发表日期: 2020
• 页码: 37-70
• 关键词: menu costs; transactions demand; inflation; money; search; MODEL; dispersion; equilibrium; adjustment; liquidity

摘要

We develop a theory of money and credit as competing payment instruments, then put it to work in applications. Agents use cash and credit because the former (latter) is subject to the inflation tax (transaction costs). Frictions that make the choice of payment method interesting also imply equilibrium price dispersion. We derive closed-form solutions for money demand, and show how to simultaneously account for the price-change facts, cash-credit shares in micro data, and money-interest correlations in macro data. The effects of inflation on welfare, price dispersion and markups are discussed, as are nonstationary equilibria with dynamics in the price distribution.