On Monetary Policy, Unemployment, and Economic Growth

Victor H. Rosas-Martinez

MPRA Paper from University Library of Munich, Germany

Abstract: Recognizing the possible relation between investments, economic growth and unemployment, and how there is not an established impact of an unlikely productive project failure on the secondly mentioned variables, we address such relation and asses theoretically the effect of different instruments of monetary policy on the mentioned macroeconomic indicators. To do this we modify two models of economic growth by considering the role of entrepreneurs, risk takers, and a monetary authority which is the average agent of the economy that is assumed to be aware of how the inflation can damage equally the individuals' life style, independently of their particular levels of income, finding that the impact of the monetary instruments depends on the behavior of the population.

Keywords: Monetary Authority; Endogenous expansive policy; Inflation; Unemployment; Economic Growth (search for similar items in EconPapers)
JEL-codes: E2 E5 O3 O4 (search for similar items in EconPapers)
Date: 2016-01-19
New Economics Papers: this item is included in nep-fdg, nep-gro, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:70980

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