An exploration of limited participation models reviews the literature and plots some new directions of research in this area. I constructed and modified a baseline cash-in-advance model to illustrate the main ideas. The model shows how limited participation can explain the liquidity effect and nonneutralities of money arising from the distribution effects of monetary policy actions.
Our Research Focus: Inflation and Monetary Policy
Amanda L. Kramer
To receive a notification by email when Economic Quarterly is posted online or to order single copies of past issues, click on the links below (published online only since 2012).