Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154980
Authors: 
Petrucci, Alberto
Year of Publication: 
1999
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 26.1999
Abstract: 
This paper analyses the issue of money superneutrality through an intertemporal optimising model of capital accumulation and inflation with endogenous fertility, i.e. endogenous population growth. The model establishes an inverse relation between capital-labour ratio and population growth, which represents the crucial element for having non-superneutrality of money. A higher monetary growth rate increases fertility, since it reduces its opportunity cost, and hence diminishes capital intensity, per capita output and consumption. The reverse Tobin effect on capital-labour ratio and per capita output is matched by an increase in aggregate capital and output growth rates. In this framework, the optimal monetary growth rule, which is a distorted Friedman rule, can call for either a contraction or an expansion of the money supply.
Subjects: 
Money Superneutrality
Fertility
Capital Accumulation
JEL: 
O42
O11
J13
Document Type: 
Working Paper

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