Money, endogenous fertility and economic growth

descriptionPublicationkeyboard_double_arrow_right Article , Other literature type , Research , Preprint 01 Jan 2003 Italy English Publisher:Elsevier BVJournal:Journal of Macroeconomics, volume 25, pages 527-539 (issn: 0164-0704,

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Authors: PETRUCCI, ALBERTO;

doi: 10.1016/j.jmacro.2002.09.001 , 10.2139/ssrn.159591

handle: 10419/154980 , 11385/3164

Money, endogenous fertility and economic growth

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Abstract

This paper analyzes the issue of money superneutrality through an intertemporal optimizing model of capital accumulation with endogenous fertility, i.e. endogenous population growth. Two elements of this setup invalidate money superneutrality: i) a demand for fertility that depends on real money balances, and ii) an inverse relation between capital-labor ratio and population growth. Higher monetary growth increases fertility, since it reduces its opportunity cost, and hence diminishes capital intensity, and per capita output. This reverse Tobin e.ect is matched by an increase in aggregate capital and output growth rates. In this framework, the optimal monetary growth rule is a "distorted Friedman rule".

Country

Italy

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Department of Economics
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Ibb University
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University of Molise
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Keywords

O42, O11, Money Superneutrality, Bevölkerungswachstum, ddc:330, :Economic Development, Technological Change, and Growth::O110 - Macroeconomic Analyses of Economic Development [Classificazione JEL], Investition, J13, :Economic Development, Technological Change, and Growth::O420 - Monetary Growth Models [Classificazione JEL], Money Superneutrality, Fertility, Capital Accumulation, Inflation, Money superneutrality; Inflation; Fertility; Capital accumulation, Monetäre Wachstumstheorie, Fertility, :Labor and Demographic Economics::J130 - Fertility; Family Planning; Child Care; Children; Youth [Classificazione JEL], Capital Accumulation, Neutralität des Geldes, Theorie, jel: jel:O42, jel: jel:J13, jel: jel:O11

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