Money, Endogenous Fertility and Economic Growth

Alberto Petrucci ()

No 1999.26, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper analyses the issue of money superneutrality through an intertemporal optimising model of capital accumulation and inflation with endogenous fertility, i.e. endogenous population growth. The model establishes an inverse relation between capital-labour ratio and population growth, which represents the crucial element for having non-superneutrality of money. A higher monetary growth rate increases fertility, since it reduces its opportunity cost, and hence diminishes capital intensity, per capita output and consumption. The reverse Tobin effect on capital-labour ratio and per capita output is matched by an increase in aggregate capital and output growth rates. In this framework, the optimal monetary growth rule, which is a distorted Friedman rule, can call for either a contraction or an expansion of the money supply.

Keywords: Money Superneutrality; Fertility; Capital Accumulation (search for similar items in EconPapers)
JEL-codes: J13 O11 O42 (search for similar items in EconPapers)
Date: 1999-03
New Economics Papers: this item is included in nep-afr, nep-dev, nep-evo and nep-mac
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Related works:
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 (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:1999.26

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