Money, Endogenous Fertility and Economic Growth
Alberto Petrucci ()
Economics & Statistics Discussion Papers from University of Molise, Dept. EGSeI
This paper analyzes the issue of money superneutrality through an intertemporal optimizing model of capital accumulation with endogenous fertility, i.e. endogenous population growth. Two elements of this setup invalidate money superneutrality: i) a demand for fertility that depends on real money balances, and ii) an inverse relation between capital-labor ratio and population growth. Higher monetary growth increases fertility, since it reduces its opportunity cost, and hence diminishes capital intensity, and per capita output. This reverse Tobin effect is matched by an increase in aggregate capital and output growth rates. In this framework, the optimal monetary growth rule is a "distorted Friedman rule".
Keywords: Money superneutrality; Inflation; Fertility; Capital accumulation (search for similar items in EconPapers)
JEL-codes: O42 O11 J13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba
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Journal Article: Money, endogenous fertility and economic growth (2003)
Working Paper: Money, Endogenous Fertility and Economic Growth (2003)
Working Paper: Money, Endogenous Fertility and Economic Growth (1999)
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Persistent link: /RePEc:mol:ecsdps:esdp03003
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