Endogenous Growth, Monetary Shocks and Nominal Rigidities

Annicchiarico, Barbara and Pelloni, Alessandra and Lorenza, Rossi (2010): Endogenous Growth, Monetary Shocks and Nominal Rigidities.

Abstract

We introduce endogenous growth in an otherwise standard NK model with staggered prices and wages. Some results follow: (i) monetary volatility negatively affects long-run growth; (ii)the relation between nominal volatility and growth depends on the persistence of the nominal shocks and on the Taylor rule considered; (iii) a Taylor rule with smoothing increases the negative effect of nominal volatility on mean growth.

• Item Type: MPRA Paper
• Language: English
• Keywords: Growth, volatility, business cycle, monetary policy
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O42 - Monetary Growth Models; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy

References

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