Effects of monetary transactions costs on economic growth

Akane Watanabe and Akira Yakita

Research in Economics, 2023, vol. 77, issue 2, 221-225

Abstract: This study explores the effects of monetary transaction costs on economic growth in a closed overlapping generations economy with cash-in-advance constraints. Working generations can also hold interest-bearing capital claims. Economic growth is powered by an engine of learning-by-doing and knowledge spillover among workers. The results indicate that reductions in transaction costs raise the balanced growth rate and possibly reduce long-term inflation and nominal interest rates.

Keywords: Transactions costs; Cash-in-advance constraint; Balanced growth (search for similar items in EconPapers)
JEL-codes: D15 E41 E44 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:77:y:2023:i:2:p:221-225

DOI: 10.1016/j.rie.2023.02.003

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