Non-separable utility, wealth effects, and economic growth in a monetary economy

Kei Hosoya ()
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Kei Hosoya: Graduate School of Economics, Hitotsubashi University

Economics Bulletin, 2002, vol. 15, issue 10, 1-7

Abstract: This paper investigates the effects of wealth-enhanced social status using an optimizing monetary growth model with non-separable utility function between consumption and wealth. Within this framework, we first arrive a conclusion that, in the case of no wealth effects, an increase in the rate of money growth does not stimulate the steady-state growth rate. Moreover, in the case of existing wealth effects, we show that an increase in the rate of money growth has a negative effect on the long-run growth rate of the economy. This result is in sharp contrast with the typical conclusion of the relevant field.

Keywords: AK; model (search for similar items in EconPapers)
JEL-codes: E0 O4 (search for similar items in EconPapers)
Date: 2002-12-27
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Citations: View citations in EconPapers (2)

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