Monetary Cycles

Author Name KOBAYASHI Keiichiro  (Fellow)
Creation Date/NO. April 2004 04-E-020
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The sources of economic fluctuations discussed in the existing literature are information asymmetry, incomplete contracts, and serially correlated exogenous shocks. We show that an economy may fluctuate cyclically without these assumptions if production of payment services (deposit money) necessitates physical capital.