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Inflation, innovation, and growth: A survey

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  • Angus C. Chu

Abstract

In this survey, we provide a selective review of the literature on inflation, innovation, and economic growth. The relationship between economic growth and inflation is a fundamental question in economics. Most studies in this literature explore this relationship in capital‐based growth models. This survey reviews a recent branch of this literature on inflation and innovation‐driven growth. Specifically, we use a canonical monetary Schumpeterian growth model to demonstrate the effects of inflation on innovation and the macroeconomy via different channels. We find that the cash‐in‐advance constraints on consumption and R&D investment have drastically different implications on the macroeconomic effects of inflation.

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  • Angus C. Chu, 2022. "Inflation, innovation, and growth: A survey," Bulletin of Economic Research, Wiley Blackwell, vol. 74(3), pages 863-878, July.
    • Handle: RePEc:bla:buecrs:v:74:y:2022:i:3:p:863-878
    DOI: 10.1111/boer.12323
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    2. Ozili, Peterson K, 2024. "Central bank digital currency, economic growth and inflation," MPRA Paper 121524, University Library of Munich, Germany.
    3. Sequeira, Tiago Neves, 2021. "Inflation, economic growth and education expenditure," Economic Modelling, Elsevier, vol. 99(C).
    4. He, Qichun & Wang, Xilin, 2020. "Money, Human Capital and Endogenous Market Structure in a Schumpeterian Economy," MPRA Paper 104609, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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