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Money, endogenous fertility and economic growth


  • Petrucci, Alberto


This paper analyzes the issue of money superneutrality through an intertemporal optimizing model of capital accumulation with endogenous fertility, i.e. endogenous population growth. Two elements of this setup invalidate money superneutrality: i) a demand for fertility that depends on real money balances, and ii) an inverse relation between capital-labor ratio and population growth. Higher monetary growth increases fertility, since it reduces its opportunity cost, and hence diminishes capital intensity, and per capita output. This reverse Tobin effect is matched by an increase in aggregate capital and output growth rates. In this framework, the optimal monetary growth rule is a "distorted Friedman rule".
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Suggested Citation

  • Petrucci, Alberto, 2003. "Money, endogenous fertility and economic growth," Journal of Macroeconomics, Elsevier, vol. 25(4), pages 527-539, December.
  • Handle: RePEc:eee:jmacro:v:25:y:2003:i:4:p:527-539

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    References listed on IDEAS

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    Cited by:

    1. Ken‐Ichi Hashimoto & Yoshiyasu Ono, 2011. "Does Pro‐Population Policy Raise Per Capita Consumption?," The Japanese Economic Review, Japanese Economic Association, vol. 62(2), pages 151-169, June.
    2. Marco Guerrazzi, 2010. "Nominal Wage Indexation, Quasi-Equilibria And Real Wage Dynamics," Bulletin of Economic Research, Wiley Blackwell, vol. 62(3), pages 279-294, July.

    More about this item

    JEL classification:

    • O42 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Monetary Growth Models
    • O11 - Economic Development, Innovation, 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


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