Imperfect Information, Money, and Economic Growth

Ho, Wai-Ming

doi:10.2307/2078072

Cited by 9 publications

(4 citation statements)

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“…In other words, the relationship that is proved by recent works shows that the volatilities of the business cycle had a negative impact on the longrun growth. Among this research, we find Aizenman and Marion (1993), Ramey and Ramey (1995), Ho (1996), Elbadawi and Hebbel (1998), Sanchez-Robles (1998), Lensink et al (1999), Martin and Rogers (2000), Beaudry et al (2001), Kneller and Young (2001), Ismihan et al (2003), Winkler (2003), Blackburn and Pellonni (2005) and Stiroh (2006). This second front of research criticizes the first one regarding the fact that they are based on the traditional growth theory.…”

Section: Introductionmentioning

confidence: 71%

The Macroeconomic Performance of the Inﬂation Targeting Policy: An Approach Based on the Evolutionary Co-Spectral Analysis

Ftiti

2009

SSRN Journal

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This paper proposes a new methodology to check the economic performance of a monetary policy and in particular the inflation targeting policy (ITP). The main idea of this work is to consider the ITP as economically efficient when it generates a stable monetary environment. The latter is considered as stable when a long-run equilibrium exists to which the paths of economic variables (inflation rate, interest rate and GDP growth) converge. The convergence of the variables' paths implies that these variables are more predictable and implies a lower degree of uncertainty in the economic environment. To measure the degree of convergence between economic variables, we propose, in this paper, a dynamic time-varying variable presented in the frequency approach named cohesion. This variable is estimated from the evolutionary co-spectral theory as defined by Priestley and Tong (1973) and Priestley (1988-1996). We apply this theory to the measure of cohesion presented by Croux et al (2001) to obtain a dynamic time-varying measure. In the last step of the study, we apply the Bai and Perron test (1998-2003b) to determine the change in the cohesion path. The results show that the implementation of the ITP generates a high degree of convergence between economic series that implies less uncertainty into the monetary environment. We conclude that the inflation targeting generates a stable monetary environment. This result allows us to conclude that the ITP is relevant in the case of industrialized countries.

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Section: Introductionmentioning

confidence: 71%

The Macroeconomic Performance of the Inﬂation Targeting Policy: An Approach Based on the Evolutionary Co-Spectral Analysis

Ftiti

2009

SSRN Journal

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“…In the model of Gomme (1993), higher inflation leads to a temporary reduction in labour supply which -via a learning-by-doing effect lowers the stock of human capital -thereby lowers the growth rate of the economy. In contrast, in the Ho (1996) model, higher inflation via a Tobin effect raises the capital stock, thereby increasing the longrun growth rate.…”

Section: Inflation and Growth Theorymentioning

confidence: 91%

How to Promote Growth in the Euro Area: The Contribution of Monetary Policy

Issing

2000

International Finance

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“…Frequency of data Threshold value Suggested form of the negative growthinflation-relationship Barro (1995Barro ( , 1996 Sidrauski (1967), Abel (1985), Feenstra (1986) Fischer (1979, Cohen (1985) Recursive time preferences depending on total wealth Epstein and Hynes (1989), Hayakawa (1992) Status effect of total wealth Zou (1998) Finite time horizon of agents (as in OLG or perpetual youth models) Drazen (1981), Marini and van der Ploeg (1988), van der Ploeg and Alogoskoufis (1994), Mino and Shibata (1995), Ho (1996), Petrucci (1999) Positive effects of inflation on the steady state or the long-run growth rate Endogenous labour-leisure choice with a dominant real balance effect on leisure (as in non-Walrasian search models) Shi (1999) Money in the production function or cash-in-advance-constraint for investment goods Levhari and Patinkin (1968), Stockman (1981), Money as a factor of production in human capital formation Marquis and Reffett (1991), Pecorino (1995), Chang (2002) Pecuniary transaction costs of inflation measured in output units Zhang (2000), Jha, Wang and Chop (2002) Negative effects of inflation on the steady state or the long-run growth rate Endogenous labour-leisure choice with a dominant consumption effect of money growth on leisure (generally considered as the normal case)…”

Section: Time Periodmentioning

confidence: 99%

Inflation, Factor Substitution and Growth

Klump

2003

SSRN Journal

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Imperfect Information, Money, and Economic Growth

Cited by 9 publications

References 0 publications

The Macroeconomic Performance of the Inﬂation Targeting Policy: An Approach Based on the Evolutionary Co-Spectral Analysis

The Macroeconomic Performance of the Inﬂation Targeting Policy: An Approach Based on the Evolutionary Co-Spectral Analysis

How to Promote Growth in the Euro Area: The Contribution of Monetary Policy

Inflation, Factor Substitution and Growth

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