Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/230481
Authors: 
Maeda, Daiki
Saito, Yuki
Year of Publication: 
2020
Series/Report no.: 
ISER Discussion Paper No. 1076
Abstract: 
To examine the effect of monetary policy on economic growth, we formulate an endogenous growth model with cash-in-advance constraints on R&D and capital accumulation as endogenous growth engines. Within this framework, we show that the relationship between economic growth and the nominal interest rate can be an inverted-U shape. Moreover, we demonstrate that the welfare-maximizing level of the nominal interest rate is larger than the growth rate-maximizing level of the nominal interest rate.
Subjects: 
Capital accumulation
CIA constraint
Endogenous growth
Monetary policy
R&D
JEL: 
E52
O31
O40
Document Type: 
Working Paper

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