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Money in the Production Function: A New Keynesian DSGE Perspective

Jonathan Benchimol ()

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
Note: View the original document on HAL open archive server: https://hal-essec.archives-ouvertes.fr/hal-00795547
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Related works:
Journal Article: Money in the production function: A new Keynesian DSGE perspective (2015) Downloads
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) Downloads
Working Paper: Money in the Production Function: A New Keynesian DSGE Perspective (2011) Downloads
Working Paper: Money in the production function: a New Keynesian DSGE perspective (2011) Downloads
Working Paper: Money in the production function: a New Keynesian DSGE perspective (2011) Downloads
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