Money and Growth in a Production Economy with Multiple Assets

Gerd Weinrich, Leo Kaas

Risultato della ricerca: Contributo in rivistaArticolo in rivistapeer review

4 Citazioni (Scopus)

Abstract

We consider a Diamond-type model of endogenous growth in which there are three assets: fiat money, government bonds, and equity. Because of productivity shocks, the equity return is uncertain, and risk-averse investors require a positive equity premium. Typically, there exist two steady states, but only one of them turns out to be stable. Tight monetary policy is harmful for growth in the stable steady state. These results hold under four different monetary policy strategies applied by the monetary authority. A monetary contraction increases the bond return and reduces the equity premium and thereby capital investment and growth.
Lingua originaleEnglish
pagine (da-a)670-690
Numero di pagine21
RivistaMacroeconomic Dynamics
Volume2003
Stato di pubblicazionePubblicato - 2003

Keywords

  • Endogenous Growth
  • Monetary Policy
  • Overlapping Generations

Fingerprint Entra nei temi di ricerca di 'Money and Growth in a Production Economy with Multiple Assets'. Insieme formano una fingerprint unica.

Cita questo