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Money and Long-run Growth


  • Zhou, Ge


This paper revisits the relationship between money and long-run growth when liquidity demand at the �rm level is explicitly modelled. Through a set of sensitivity analyses, I �nd that this relationship could be positive, negative, or display a hump shape depending on the size of average liquidity demand and the level of �nancial development. These results explain why existing empirical studies report mixed �ndings on the relationship.

Suggested Citation

  • Zhou, Ge, 2011. "Money and Long-run Growth," MPRA Paper 33765, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:33765

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    References listed on IDEAS

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    More about this item


    Liquidity Demand; Endogenous Growth; Monetary Supply;

    JEL classification:

    • O42 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Monetary Growth Models
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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