TY  - GEN
AB  - We present a monetary endogenous growth model and analyze the effects of fiscal and monetary policy with real money as an argument in the utility function. We show that a balanced government budget gives a higher balanced growth rate and lower inflation than a situation with permanent public deficits. It also leads to higher welfare compared to a situation with permanent deficits where the overnment does not put a high weight on stabilizing debt. However, when governments run deficits with a high weight on stabilizing debt, comparative welfare effects depend on the
initial conditions with respect to public debt. Further, for a given monetary policy a stricter debt policy yields higher growth, lower inflation and higher welfare. A
rise in the nominal money supply can compensate the negative growth effects of a loose debt policy up to a certain point but only at the cost of higher inflation and
lower welfare.
DA  - 2013
DO  - 10.4119/unibi/2562662
KW  - monetary policy
KW  - inter-temporal budget constraint
KW  - Public debt
KW  - economicgrowth
LA  - eng
PY  - 2013
SN  - 2196-2723
SP  - 21-
TI  - Fiscal and monetary policy in a basic endogenous growth model
UR  - https://nbn-resolving.org/urn:nbn:de:0070-pub-25626629
Y2  - 2024-11-22T04:05:44
ER  -