COWLES FOUNDATION FOR RESEARCH IN ECONOMICS
AT YALE UNIVERSITY

Box 208281
New Haven, CT 06520-8281

COWLES FOUNDATION DISCUSSION PAPER NO. 1014

"Transactions Loans, Intertemporal Loans, Variable Velocity,
the Rates of Interest and Commodity Money:
Part 1. Transactions Loans"

Martin Shubik and Shuntian Yao

January 1992

Several models of exchange are presented here to illustrate various conceptual problems in the microeconomic model of the velocity of money and the meaning of and cost of liquidity in an exchange economy without exogenous uncertainty.