Endogenous Growth, Monetary Shocks and Nominal Rigidities
University of Rome II - Department of Economics and Law
University of Rome II, Department of Economics
University of Rome II - Faculty of Economics; Government of the Italian Republic (Italy) - National Institute of Statistics (Istat)
February 1, 2011
CEIS Tor Vergata Research Paper Series, Vol. 9, No. 3, p. 187, February 2011
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.
Number of Pages in PDF File: 13
Keywords: Growth, volatility, business cycle, monetary policy
JEL Classification: E32, E52, 042working papers series
Date posted: March 9, 2011
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