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Endogenous Growth, Monetary Shocks and Nominal Rigidities

  • Barbara Annicchiarico


    (Department of Economics, University of Rome ‘Tor Vergata’)

  • Alessandra Pelloni

    (Department of Economics, University of Rome ‘Tor Vergata’)

  • Lorenza Rossi


    (Department of Economics and Quantitative Methods, University of Pavia)

We introduce endogenous growth in an otherwise standard NK model with staggered prices and wages. Some results follow: (i) monetary volatility negatively affects long-run growth; (ii) the relation between nominal volatility and growth depends on the persistence of the nominal shocks and on the Taylor rule considered; (iii) a Taylor rule with smoothing increases the negative effect of nominal volatility on mean growth.

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Paper provided by University of Pavia, Department of Economics and Quantitative Methods in its series Quaderni di Dipartimento with number 120.

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Length: 14 pages
Date of creation: Aug 2010
Date of revision:
Handle: RePEc:pav:wpaper:120
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