Money in the Production Function: A New Keynesian DSGE Perspective

Jonathan Benchimol

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: This paper proposes a New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model where real money balances enter the production function. By using a Bayesian analysis, our model shows that money is not an omitted input to the production process and rejects the decreasing returns to scale hypothesis. Our simulations suggest that money plays a negligible role in the dynamics of output and inflation, despite its inclusion in the production function. In addition, we introduce the flexible-price real money balances concept.

Keywords: Bayesian estimation; Money in the production function; DSGE; Bayesian estimation. (search for similar items in EconPapers)
Date: 2011-12-08
New Economics Papers: this item is included in nep-mon
Note: View the original document on HAL open archive server: https://essec.hal.science/hal-00795547
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Money in the production function: A new Keynesian DSGE perspective (2015)
Working Paper: Money in the production function: A new Keynesian DSGE perspective (2015)
Working Paper: Money in the Production Function: a new Keynesian DSGE perspective (2013)
Working Paper: Money in the production function: a New Keynesian DSGE perspective (2011)
Working Paper: Money in the Production Function: A New Keynesian DSGE Perspective (2011)
Working Paper: Money in the production function: a New Keynesian DSGE perspective (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:hal-00795547

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