Social Status, Human Capital Formation and the Long-run Effects of Money
AbstractThis study examines the effects of monetary policy in a two-sector cash-in-advance economy of human capital accumulation. Agents concern about their social status represented by the relative physical capital and relative human capital. We find that if the desire for social status depends only on relative physical capital, money is superneutral in the growth-rate sense. However, if the desire for social status depends on relative human capital, the money growth rate will have a positive effect on the long-run economic growth rate. Furthermore, an increase in the desire to pursue human capital will raise the long-run growth rate, but an increase in the desire to pursue physical capital will lower it.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 30253.
Date of creation: 2011
Date of revision:
Cash-in-advance economy; Endogenous growth; Social status.;
Other versions of this item:
- Hung-Ju Chen, 2012. "Social status, human capital formation and the long-run effects of money," Journal of Economics, Springer, vol. 105(3), pages 225-246, April.
- O42 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Monetary Growth Models
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-30 (All new papers)
- NEP-DGE-2011-04-30 (Dynamic General Equilibrium)
- NEP-FDG-2011-04-30 (Financial Development & Growth)
- NEP-HRM-2011-04-30 (Human Capital & Human Resource Management)
- NEP-MON-2011-04-30 (Monetary Economics)
- NEP-SOC-2011-04-30 (Social Norms & Social Capital)
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