Relatore:
Leo Ferraris
- Carlos III, Madrid
mercoledì 5 maggio 2010
alle ore
12.30
Biblioteca DSE, Palazzina 32 ex caserma Passalacqua
This paper presents a microfounded model of money with a consumption and an investment
market. We consider an economy in which only part of the investment returns
can be pledged. A liquidity constraint arises when the pledgeable part of the returns are
not enough to pay for investment costs. We show that when the liquidity constraint is
binding, agents may make a cash downpayment and money can perform two roles – as a
provider of liquidity services and exchange services. The liquidity constraint constitutes a
channel though which under-investment occurs even at low inflation rates.
pdf (it, 407 KB, 01/04/10)
