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Money, Endogenous Fertility and Economic Growth

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  • Alberto Petrucci

    (Universita' del Molise, Campobasso - LUISS G. Carli, Rome)

Abstract

This 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.

Suggested Citation

  • Alberto Petrucci, 1999. "Money, Endogenous Fertility and Economic Growth," Working Papers 1999.26, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:1999.26
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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

    Keywords

    Money Superneutrality; Fertility; Capital Accumulation;

    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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