This paper examines the importance of financial and technological stochastic trends in the context of a stochastic, dynamic, general equilibrium monetary economy with multiple means of payment. In contrast to earlier empirical work, we find support for both a long-run substitution condition between money, trade credit, and interest rates as well as a long-run transactions demand for alternative payments media consistent with real business cycle frameworks.
- Canonical cointegrating regression
- General equilibrium
- Multiple means of payment models
- Stochastic trends
- Trade credit
ASJC Scopus subject areas
- Economics and Econometrics