Variation 4: Differentiated goods, multiple means of payment, and money as single outside asset

In the previous chapter we presented a simple version of a cash-in-advance framework in order to challenge the bubbly view on money from a fundamentalist perspective. In particular, we assumed in chapter 7 that a fixed fraction of purchases needed to be settled by payment in cash. Obviously, this is a questionable assumption, and certainly it is not suited to give a satisfactory account of the long run. We therefore summarize in this chapter briefly more involved specifications discussed in the cash-in-advance literature and present then a framework which permits a more subtle discussion of the superneutrality issue.