Money and growth through innovation cycles with leisure

Jing Wan and Jie Zhang

Economics Letters, 2016, vol. 148, issue C, 23-26

Abstract: We study monetary policy with growth through innovation cycles and leisure. If consumption is cash constrained, increasing money growth for lower income taxes increases labor, output, investment, innovation, and growth and amplifies fluctuations on a period-two-cycle path. It induces convergence to the balanced-growth path at sufficiently high money growth rates. If investment for innovation and intermediate production is also cash constrained, the effects of money on labor, investment, innovation, and growth become negative at sufficiently high money growth rates.

Keywords: Money; Labor; Innovation; Investment; Growth; Cycles (search for similar items in EconPapers)
JEL-codes: D9 E3 E5 E6 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:148:y:2016:i:c:p:23-26

DOI: 10.1016/j.econlet.2016.09.009

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