Search, Money and Capital: A Neoclassical Dichotomy
S. Boragan Aruoba and Randall D. Wright
,
6
(
35
)
Journal of Money Credit and Banking
1085-1105
December
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 toward this integration by introducing labor, capital, and neoclassical firms. The resulting framework nests a search-theoretic monetary model and a standard neoclassical growth model as special cases.