TY  - UNPD
A1  - Klump, Rainer
T1  - Inflation, factor substitution and growth
T2  - European Central Bank: Working paper series ; No. 280
N2  - Recent empirical studies on the inflation-growth-relationship underline that inflation has negative growth effects already under relatively modest rates. Most contributions to monetary growth theory, however, have difficulties in explaining such a pattern. It is shown in this paper that this problem can be overcome by establishing a link between monetary instability and the aggregate elasticity of factor substitution. Several microeconomic justifications can be found for a negative influence of inflation on factor substitution. It turns out that already in a simple neoclassical monetary growth model this effect is usually strong enough to question the superneutrality benchmark result in the steady state and to dominate all potential positive effects of inflation along the convergence path. In a more general perspective the paper contributes to a better integration of institutional change in aggregate models of economic growth.
T3  - European Central Bank: Working paper series - 280 
KW  - Monetäre Wachstumstheorie
KW  - Inflation
KW  - CES-Funktion
KW  - Neoklassische Theorie
KW  - Aufholprozess
KW  - Nachholende Entwicklung
KW  - Monetary growth models
KW  - inflation
KW  - CES production functions
KW  - neo-classical growth
KW  - convergence
Y1  - 2003
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/33323
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-333231
UR  - http://ssrn.com/abstract=487420
SN  - 1725-2806
N1  - © European Central Bank, 2003. Reproduction for educational and non-commercial purposes is permitted provided that the source is acknowledged. The views expressed in this paper do not necessarily reflect those of the European Central Bank.
PB  - Europ. Central Bank
CY  - Frankfurt am Main
ER  -