13 Pages Posted: 9 Mar 2011
Date Written: February 1, 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.
Keywords: Growth, volatility, business cycle, monetary policy
JEL Classification: E32, E52, 042
Suggested Citation: Suggested Citation
Annicchiarico, Barbara and Pelloni, Alessandra and Rossi, Lorenza, Endogenous Growth, Monetary Shocks and Nominal Rigidities (February 1, 2011). CEIS Tor Vergata Research Paper Series, Vol. 9, No. 3, p. 187, February 2011. Available at SSRN: https://ssrn.com/abstract=1781035 or http://dx.doi.org/10.2139/ssrn.1781035