Money, Endogenous Fertility and Economic Growth
AbstractThis 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.
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Bibliographic InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 1999.26.
Date of creation: Mar 1999
Date of revision:
Money Superneutrality; Fertility; Capital Accumulation;
Other versions of this item:
- O42 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Monetary Growth Models
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
This paper has been announced in the following NEP Reports:
- NEP-AFR-2004-06-13 (Africa)
- NEP-ALL-2004-06-13 (All new papers)
- NEP-DEV-1999-06-08 (Development)
- NEP-EVO-2004-06-13 (Evolutionary Economics)
- NEP-MAC-2004-06-13 (Macroeconomics)
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