This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Non-neutrality and Uncertainty in a Model of Growth

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
D Varvarigos
Abstract

This paper develops a model that examines the effect of monetary policy uncertainty on trend growth. It is assume that the provision of potentially productive public goods and services is financed by money creation (seignorage). Uncertainty derives from stochastic fluctuations in money supply. It is found that money is not neutral and that higher variability in money growth affects the choices of individuals on how to allocate their time between different activities. Depending on the underlying mechanism through which improvements in productivity occur, a greater degree of monetary policy uncertainty (higher monetary variability) can have either positive or negative effects on the average rate of growth.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.socialsciences.manchester.ac.uk/cgbcr/dpcgbcr/dpcgbcr41.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Economics, The Univeristy of Manchester in its series Centre for Growth and Business Cycle Research Discussion Paper Series with number 41.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 18 pages
Date of creation: 2004
Date of revision:
Handle: RePEc:man:cgbcrp:41

Contact details of provider:
Postal: Manchester M13 9PL
Phone: (0)161 275 4868
Fax: (0)161 275 4812
Web page: http://www.socialsciences.manchester.ac.uk/cgbcr/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Marianne Sensier).

Related research
Keywords: volatility; growth; seignorage;

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October. [Downloadable!] (restricted)
  2. Blackburn, Keith & Galindev, Ragchaasuren, 2003. "Growth, volatility and learning," Economics Letters, Elsevier, vol. 79(3), pages 417-421, June. [Downloadable!] (restricted)
  3. Rankin, Neil, 1998. "Nominal rigidity and monetary uncertainty in a small open economy," Journal of Economic Dynamics and Control, Elsevier, vol. 22(5), pages 679-702, May. [Downloadable!] (restricted)
    Other versions:
  4. Easterly, William & DEC, 1993. "How much do distortions affect growth?," Policy Research Working Paper Series 1215, The World Bank. [Downloadable!]
    Other versions:
  5. Smith, R Todd, 1996. "Cyclical Uncertainty, Precautionary Saving and Economic Growth," Economica, London School of Economics and Political Science, vol. 63(251), pages 477-94, August. [Downloadable!] (restricted)
  6. de la Croix, David, 2001. "Growth dynamics and education spending: The role of inherited tastes and abilities," European Economic Review, Elsevier, vol. 45(8), pages 1415-1438, August. [Downloadable!] (restricted)
  7. Rankin, Neil, 1998. "Nominal rigidity and monetary uncertainty," European Economic Review, Elsevier, vol. 42(1), pages 185-199, January. [Downloadable!] (restricted)
    Other versions:
  8. Click, Reid W, 1998. "Seigniorage in a Cross-Section of Countries," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 30(2), pages 154-71, May.
  9. Turnovsky, Stephen J, 1993. "Macroeconomic Policies, Growth, and Welfare in a Stochastic Economy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(4), pages 953-81, November. [Downloadable!] (restricted)
  10. Martin, Philippe & Ann Rogers, Carol, 2000. "Long-term growth and short-term economic instability," European Economic Review, Elsevier, vol. 44(2), pages 359-381, February. [Downloadable!] (restricted)
    Other versions:
  11. van der Ploeg, Frederick & Alogoskoufis, George S, 1994. "Money and Endogenous Growth," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 26(4), pages 771-91, November. [Downloadable!] (restricted)
  12. Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 813-34, August.
  13. K Blackburn & R Galindev, 2003. "Growth, volatility and learning," Centre for Growth and Business Cycle Research Discussion Paper Series 25, Economics, The Univeristy of Manchester. [Downloadable!]
  14. Cavalcanti Ferreira, Pedro, 1999. "Inflationary financing of public investment and economic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 23(4), pages 539-563, February. [Downloadable!] (restricted)
  15. Hopenhayn, H. & Maniagurria, M.E., 1996. "Policy Variability and Economic Growth," RCER Working Papers 422, University of Rochester - Center for Economic Research (RCER).
    Other versions:
  16. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S103-26, October. [Downloadable!] (restricted)
    Other versions:
  17. repec:fth:simfra:93-03 is not listed on IDEAS
  18. Basu, Parantap, 2001. "Reserve Ratio, Seigniorage and Growth," Journal of Macroeconomics, Elsevier, vol. 23(3), pages 397-416, July. [Downloadable!] (restricted)
  19. Canton, E., 1996. "Business cycles in a two-sector model of endogenous growth," Discussion Paper 116, Tilburg University, Center for Economic Research. [Downloadable!]
  20. Gomme, P., 1993. "Money and Growth Revisited : Measuring the Costs of Inflation in an Endogenous Growth Model," Discussion Papers dp93-03, Department of Economics, Simon Fraser University.
    Other versions:
  21. repec:att:wimass:1919999 is not listed on IDEAS
  22. repec:cup:macdyn:v:2:y:1998:i:3:p:322-44 is not listed on IDEAS
  23. Blackburn, Keith & Pelloni, Alessandra, 2004. "On the relationship between growth and volatility," Economics Letters, Elsevier, vol. 83(1), pages 123-127, April. [Downloadable!] (restricted)
  24. Kneller, Richard & Young, Garry, 2001. "Business Cycle Volatility, Uncertainty and Long-Run Growth," Manchester School, University of Manchester, vol. 69(5), pages 534-52, Special I. [Downloadable!] (restricted)
  25. Sergio T. Rebelo, 1992. "Long Run Policy Analysis and Long Run Growth," NBER Working Papers 3325, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  26. Larry E. Jones & Rodolfo E. Manuelli & Ennio Stacchetti, 1999. "Technology (and Policy) Shocks in Models of Endogenous Growth," NBER Working Papers 7063, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  27. Aizenman, Joshua & Marion, Nancy P, 1993. "Policy Uncertainty, Persistence and Growth," Review of International Economics, Blackwell Publishing, vol. 1(2), pages 145-63, June.
    Other versions:
  28. Evans, Lynne & Kenc, Turalay, 2001. "Growth and Welfare Effects of Monetary Volatility," Manchester School, University of Manchester, vol. 69(5), pages 509-33, Special I. [Downloadable!] (restricted)
  29. de Hek, Paul A, 1999. "On Endogenous Growth under Uncertainty," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 727-44, August.
  30. Ramey, Garey & Ramey, Valerie A, 1995. "Cross-Country Evidence on the Link between Volatility and Growth," American Economic Review, American Economic Association, vol. 85(5), pages 1138-51, December. [Downloadable!] (restricted)
    Other versions:
  31. K Blackburn & R Galindev, 2003. "Growth, Volatility and Learning," The School of Economics Discussion Paper Series 0303, Economics, The University of Manchester. [Downloadable!]
  32. Aghion, Philippe & Saint-Paul, Gilles, 1998. "VIRTUES OF BAD TIMES Interaction Between Productivity Growth and Economic Fluctuations," Macroeconomic Dynamics, Cambridge University Press, vol. 2(03), pages 322-344, September. [Downloadable!]
  33. Roubini, Nouriel & Sala-i-Martin, Xavier, 1995. "A growth model of inflation, tax evasion, and financial repression," Journal of Monetary Economics, Elsevier, vol. 35(2), pages 275-301, April. [Downloadable!] (restricted)
    Other versions:
  34. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July. [Downloadable!] (restricted)
Full references

Statistics
Access and download statistics

Did you know? Data contributors to RePEc receive monthly emails with details about downloads and abstract views of their works.

This page was last updated on 2009-11-2.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.