Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/257071 
Year of Publication: 
2020
Citation: 
[Journal:] Economies [ISSN:] 2227-7099 [Volume:] 8 [Issue:] 1 [Article No.:] 22 [Publisher:] MDPI [Place:] Basel [Year:] 2020 [Pages:] 1-14
Publisher: 
MDPI, Basel
Abstract: 
We develop an overlapping generations monetary endogenous growth (generated by productive public expenditures) model with inflation targeting, characterized by relocation shocks for young agents, which in turn generates a role for money (even in the presence of the return-dominating physical capital) and financial intermediaries. Based on this model, we show that growth dynamics emerge with a S-shaped growth path producing three equilibria. The low and high-growth equilibria are stable, but locally indeterminate, while the medium-growth equilibrium is unstable. Since, government expenditure is productive in our model, a higher inflation-target would translate into higher growth, but under multiple equilibria, this is not necessarily always the case.
Subjects: 
endogenous growth
growth dynamics
inflation targeting
JEL: 
C62
O41
O42
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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