A Two-Sector Model of Endogenous Growth with Money

Name: A Two-Sector Model of Endogenous Growth with Money
Brand: Vita e Pensiero
Price: 6.00 EUR
Availability: OnlineOnly

digital

Article

Magazine

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI

Issue

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2004 - 3

Title

A Two-Sector Model of Endogenous Growth with Money

Author

Salvatore Capasso

Publisher

Vita e Pensiero

Format

Article |

Pdf

Pages

Online from

09-2017

Issn

0035-676X (print) | 1827-7918 (digital)

€ 6.00

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Description

Use a two-sector model in which both physical and human capital is employed in the production process, and real money balances function as a Hicks neutral technological factor in the production of physical goods. Even though money has no effect on steady state growth, its inclusion as a production factor forces production parameters to remain within a specific range of values, so that human capital and physical capital grow at different rates. In this model, steady state growth is not influenced (as it usually is) by the parameters by which the willingness to save is determined, such as the rate of time preference or rates of depreciation. Rather, it is determined solely by the form and parameters of the production functions.