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This analysis aims to challenge the relevance of money in cashless-limiting economies as foundational for monetary policy.

onetary Economics at 30: A Reexamination of the Relevance of Money in Cashless Limiting Monetary Economies

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Theoretical analysis reveals flaws in cashless-limiting models for monetary policy advice.

This analysis aims to challenge the relevance of money in cashless-limiting economies as foundational for monetary policy.
Reexamined the cashless-limiting result from Woodford (1998)
Generalized the credit-market microstructure to include endogenous interest rates and market power
Analyzed implications for monetary transmission and policy advice.
The cashless-limiting result fails when market power is introduced in credit intermediation
Endogenous interest rates alter the insights about holding money in the economy
The breakdown of the result calls for caution in monetary policy models that ignore money.

Ricardo Lagos (2026) studied this question.

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