Endogenous Growth, Monetary Shocks and Nominal Rigidities
Annicchiarico BarbaraPelloni AlessandraRossi Lorenza
CEIS Research Paper
We introduce endogenous growth in an otherwise standard NK model with staggered prices and wages. Some results follow: (i) monetary volatility negatively affects long-run growth; (ii) the relation between nominal volatility and growth depends on the persistence of the nominal shocks and on the Taylor rule considered; (iii) a Taylor rule with smoothing increases the negative effect of nominal volatility on mean growth.
Number: 187
Keywords: Growth, volatility, business cycle, monetary policy
JEL codes: E32, E52, O42
Date: Tuesday, March 8, 2011
Revision Date: Tuesday, March 8, 2011