Growth, Volatility And Stabilisation Policy In A DSGE Model With Nominal Rigidities And Learning-By-Doing

Pham The Anh ()
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Pham The Anh: Department of Economics, National Economics University, Vietnam

No 4, Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam

Abstract: The paper aims to analyse the question of how cyclical fluctuations might affect long run growth. The analysis is based on a dynamic stochastic general equilibrium model for an imperfectly competitive economy with fully optimising agents. The model is characterized with nominal rigidities, an endogenous technology, and multiple shocks. It predicts either a negative or positive relationship between short run volatility and long run growth depending on the source of shocks and the reaction of the central bank. The model also shows that, even when the negative relationship exits the policy that is designed to stabilise short run volatility may either increase or decrease growth depending on the source of shocks.

Keywords: Imperfect Competition; Nominal Rigidities; Growth; Volatility; Stabilisation Policy (search for similar items in EconPapers)
JEL-codes: E31 E37 E52 O42 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2007-06
New Economics Papers: this item is included in nep-cba, nep-dge and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:dpc:wpaper:0407

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