In popular explanations of markets, there are discrepancies to be corrected. First of all, market trade means flows and its outcome should not be determined by a stock quantity. Second, market demand is not to be defined by the opportunity cost. Third, money is merely a medium of exchange, not an object of trade. On these premises some important implications are presented: the interest rate is determined in all asset markets in one; the money market model is misconceived; the market for loanable funds has limited use, and; large transaction costs dismiss the concept of the natural level of output.
Please see the attachment for more detail.
01 Markets for a Flow (YDA).pdf
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YD Ahn-Markets for a Flow.pdf
0.2MB
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