Inflation and economic growth in a Schumpeterian model with endogenous entry of heterogeneous firms

Angus C. Chu, Guido Cozzi, Yuichi Furukawa, Chih Hsing Liao

研究成果: 雜誌貢獻期刊論文同行評審

43 引文 斯高帕斯(Scopus)

摘要

This study develops a Schumpeterian growth model with endogenous entry of heterogeneous firms to analyze the effects of monetary policy on economic growth via a cash-in-advance constraint on R&D investment. Our results can be summarized as follows. In the special case of a zero entry cost, an increase in the nominal interest rate decreases R&D, the arrival rate of innovations and economic growth as in previous studies. However, in the general case of a positive entry cost, an increase in the nominal interest rate affects the distribution of innovations that are implemented and would have an inverted-U effect on economic growth if the entry cost is sufficiently large. We also calibrate the model to aggregate data of the US economy and find that the growth-maximizing inflation rate is about 3%, which is consistent with recent empirical estimates. Finally, we also explore the welfare effects of inflation and consider a number of extensions to the benchmark model.

原文???core.languages.en_GB???
頁(從 - 到)392-409
頁數18
期刊European Economic Review
98
DOIs
出版狀態已出版 - 9月 2017

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