IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/17011.html
   My bibliography  Save this paper

Monetary Expansion and Converging Speed in a Growing Economy

Author

Listed:
  • Mino, Kazuo

Abstract

This paper explores the effect of monetary policy on the speed of convergence. Using a neoclassical monetary growth model with a cash-in-advance constraint, we conduct numerical evaluation of the effect of changes in the growth rate of money supply on the converging speed of the economy. We find that, in contrast to fiscal actions, a change in monetary policy may produce little impact on the converging speed. This result indicates that the growth effect of inflation established in the theoretical models of money and growth would be extremely small, if we evaluated it quantitatively.

Suggested Citation

  • Mino, Kazuo, 2000. "Monetary Expansion and Converging Speed in a Growing Economy," MPRA Paper 17011, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:17011
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/17011/1/MPRA_paper_17011.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fischer, Stanley, 1979. "Capital Accumulation on the Transition Path in a Monetary Optimizing Model," Econometrica, Econometric Society, vol. 47(6), pages 1433-1439, November.
    2. King, Robert G & Rebelo, Sergio T, 1993. "Transitional Dynamics and Economic Growth in the Neoclassical Model," American Economic Review, American Economic Association, vol. 83(4), pages 908-931, September.
    3. Feenstra, Robert C., 1986. "Functional equivalence between liquidity costs and the utility of money," Journal of Monetary Economics, Elsevier, vol. 17(2), pages 271-291, March.
    4. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    5. Rebelo, Sergio & Xie, Danyang, 1999. "On the optimality of interest rate smoothing," Journal of Monetary Economics, Elsevier, vol. 43(2), pages 263-282, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mansoorian, Arman & Michelis, Leo, 2005. "Money, habits and growth," Journal of Economic Dynamics and Control, Elsevier, vol. 29(7), pages 1267-1285, July.
    2. Massimiliano Affinito, 2011. "Convergence clubs, the euro-area rank and the relationship between banking and real convergence," Temi di discussione (Economic working papers) 809, Bank of Italy, Economic Research and International Relations Area.
    3. Robert M. Solow, 2000. "La teoria neoclassica della crescita e della distribuzione," Moneta e Credito, Economia civile, vol. 53(210), pages 149-185.
    4. Jonathan Temple & Huikang Ying & Patrick Carter, 2014. "Transfers and Transformations: Remittances, Foreign Aid, and Growth," Bristol Economics Discussion Papers 14/649, School of Economics, University of Bristol, UK, revised 02 Dec 2014.
    5. Gokan, Yoichi, 2003. "The speed of convergence and alternative government financing," Journal of Economic Dynamics and Control, Elsevier, vol. 27(9), pages 1517-1531, July.
    6. Miao, Jianjun & Xie, Danyang, 2013. "Economic growth under money illusion," Journal of Economic Dynamics and Control, Elsevier, vol. 37(1), pages 84-103.
    7. Adriana Di Liberto, 2007. "Convergence and Divergence in Neoclassical Growth Models with Human Capital," Economia politica, Società editrice il Mulino, issue 2, pages 289-322.
    8. Arman Mansoorian & Mohammed Mohsin, 2004. "Monetary policy in a cash-in-advance economy: employment, capital accumulation, and the term structure of interest rates," Canadian Journal of Economics, Canadian Economics Association, vol. 37(2), pages 336-352, May.
    9. Jordan Rappaport, 2000. "How does openness to capital flows affect growth?," Research Working Paper RWP 00-11, Federal Reserve Bank of Kansas City.
    10. Petrucci, Alberto, 1997. "Money, Labour Supply and Growth in a Liquidity Costs Economy," Discussion Papers 9707, University of Exeter, Department of Economics.
    11. Alogoskoufis, G.S. & van der Ploeg, F., 1991. "Money and growth revisited," Discussion Paper 1991-9, Tilburg University, Center for Economic Research.
    12. Hamilton, James D. & Monteagudo, Josefina, 1998. "The augmented Solow model and the productivity slowdown," Journal of Monetary Economics, Elsevier, vol. 42(3), pages 495-509, October.
    13. Vasilev, Aleksandar, 2015. "Growth and convergence in the Central and East European countries towards EU (1992-2002)," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 6(1), pages 63-89.
    14. Benny Kleinman & Ernest Liu & Stephen J. Redding & Motohiro Yogo, 2023. "Neoclassical growth in an interdependent world," CEP Discussion Papers dp1965, Centre for Economic Performance, LSE.
    15. Duczynski, Petr, 2002. "Adjustment costs in a two-capital growth model," Journal of Economic Dynamics and Control, Elsevier, vol. 26(5), pages 837-850, May.
    16. Paul M. Romer, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter.
    17. Perez-Sebastian, Fidel, 2000. "Transitional dynamics in an R&D-based growth model with imitation: Comparing its predictions to the data," Journal of Monetary Economics, Elsevier, vol. 45(2), pages 437-461, April.
    18. Salvador Ortigueira & Manuel S. Santos, 1994. "On Convergence in Endogenous Growth Models," Working Papers 9409, Centro de Investigacion Economica, ITAM.
    19. Carlos Estaban Posada & Wilman Gómez, 2002. "Crecimiento económico y gasto público: un modelo para el caso colombiano," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 20(41-42), pages 5-86, June.
    20. Rubens Penha Cysne & David Turchick, 2010. "Money Supply and Capital Accumulation on the Transition Path Revisited," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 42(6), pages 1173-1184, September.

    More about this item

    Keywords

    monetary growth; speed of convergence; neoclassical growth model;
    All these keywords.

    JEL classification:

    • O42 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Monetary Growth Models
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:17011. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.