Money and Long-run Growth

Zhou, Ge (2011): Money and Long-run Growth.

Abstract

This paper revisits the relationship between money and long-run growth when liquidity demand at the �rm level is explicitly modelled. Through a set of sensitivity analyses, I �nd that this relationship could be positive, negative, or display a hump shape depending on the size of average liquidity demand and the level of �nancial development. These results explain why existing empirical studies report mixed �ndings on the relationship.

• Item Type: MPRA Paper
• Language: English
• Keywords: Liquidity Demand, Endogenous Growth, Monetary Supply
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O42 - Monetary Growth Models; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E51 - Money Supply ; Credit ; Money Multipliers; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance

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