Long-run effects of monetary expansion in a two-sector model of endogenous growth
Article Abstract:
Monetary expansion affects the economy's long-term growth only when cash-in-advance constraint is implemented in investment spending. A distinct balanced-growth rate results when investment undergoes cash-in-advance constraint and consumption's intertemporal substitutability is not very high. On the other hand, capital growth creates a straightforward effect in balanced-equilibrium whenever labor-leisure choice is absent.
Publication Name: Journal of Macroeconomics
Subject: Economics
ISSN: 0164-0704
Year: 1997
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The last shall be first: efficient constraints on foreign borrowing in a model of endogenous growth
Article Abstract:
An analysis of optimal limits on the structure of foreign loans is presented. The analysis assumes conditions of an endogenous growth model where a trade-off between production and productivity growth in an open economy is given. It is shown that setting constraints to foreign borrowings generates short-term welfare increases. In addition, the use of tax on such loans as a fiscal tool sets efficient tax rate cycles.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1992
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