Chapter 18. Macro Money and Finance : A Continuous Time Approach This chapter puts forward a manual for how to setup and solve a continuous time model that allows to analyze endogenous (1) level and risk dynamics. The latter includes (2) tail risk and crisis probability as well as (3) the Volatility Paradox. Concepts such as (4) illiquidity and liquidity mismatch (5) endogenous leverage (6) the Paradox of Prudence (7) undercapitalized sectors (8) time varying risk premia and (9) the external funding premium are part of the analysis. Financial frictions also give rise to an endogenous (10) value of money.