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On Monetary Policy, Unemployment, and Economic Growth

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  • Rosas-Martinez, Victor H.

Abstract

Recognizing the possible relation between investments, economic growth and unemployment, and how there is not an established impact of an unlikely productive project failure on the secondly mentioned variables, we address such relation and asses theoretically the effect of different instruments of monetary policy on the mentioned macroeconomic indicators. To do this we modify two models of economic growth by considering the role of entrepreneurs, risk takers, and a monetary authority which is the average agent of the economy that is assumed to be aware of how the inflation can damage equally the individuals' life style, independently of their particular levels of income, finding that the impact of the monetary instruments depends on the behavior of the population.

Suggested Citation

  • Rosas-Martinez, Victor H., 2016. "On Monetary Policy, Unemployment, and Economic Growth," MPRA Paper 70980, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:70980
    as

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    References listed on IDEAS

    as
    1. Villalpando B. Mario, 2015. "Bank Credit and Productivity: Evidence from Mexican Firms," Working Papers 2015-06, Banco de México.
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    3. Ben S. Bernanke & Ilian Mihov, 1998. "Measuring Monetary Policy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(3), pages 869-902.
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    5. Ackert, Lucy F. & Charupat, Narat & Deaves, Richard & Kluger, Brian D., 2009. "Probability Judgment Error and Speculation in Laboratory Asset Market Bubbles," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 44(3), pages 719-744, June.
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    More about this item

    Keywords

    Monetary Authority; Endogenous expansive policy; Inflation; Unemployment; Economic Growth;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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